Aswath Damodaran: The Professor Who Cracked Content

Transcription

Daniel: And what prompted you to make that switch to a more open method of sharing your lectures? Matt: Well, initially, it wasn't even about reaching a wider audience. It was more about serving my students better. The tech came along, and suddenly, there was this opportunity to record classes, to share slides and videos. So I thought, why not use that to create a resource that my students can refer back to whenever they need it? That's how it all started for me. Daniel: And I imagine it quickly evolved from there. How did you decide which platforms to use? Matt: You know, it's funny. I didn't have a grand strategic master plan. I started with platforms like YouTube simply because they were convenient, and they made it easy to upload long videos. Platforms like LinkedIn and X were more about engaging with students and professionals outside of academia. They each had their strengths, and I just tried to use them to their full potential. Matt: But the only way what I taught in that room got outside is when those people talked to other people. And that's the way the world was until the internet got created. So the early 90s, I started taking advantage of it in very basic ways. I started recording my classes with a camcorder in the classroom, with actually a VHS or one of those big cameras set up in the back. And I made tapes. And initially, I just put the tapes into the library so that people could come into the NYU library if they even if they weren't in my class and watch the lectures. That kind of increased my potential audience from 200 to perhaps 400 people. And then towards, I don't remember the exact time, towards the late 90s, the technology for converting a video class into an online video came into being. It was very primitive. It took hours. The quality was awful. There was really no platform to share it on, right? Remember, this predates YouTube and TikTok and all that stuff. But I started making online videos and using what primitive platforms there were in sharing the class. So that expanded my reach. Now, why was I trying to expand my reach? If you're a teacher, you prepare for a class. I mean, it's like being an actor. The larger the audience that can get to see it, the more you feel that that content paid off. So early on, my objective was to get those online videos out there. But I also started sharing the rest of my material. The videos were almost an afterthought. They were tough to get to. Daniel: Most people couldn't get to them. But the rest of the material in my class, I shared. And those were much easier to get. You could download them as, you know, whatever, the Excel files, as Word files, and read them for yourself as PowerPoint files. Then, in the early part of the century, the technology started to pick up. The platform started to get more sophisticated. YouTube was still not around. But I was able to share with more people and convert my lectures into more watchable videos. So that brings us to about 20 years ago when the first online courses like Coursera came in and their initial promise was, we're going to replace universities. And I knew that they wouldn't because they thought, at least the people who created these online education platforms thought that if all you did was took the lectures and made them video lectures, you could replace a classroom. They missed everything else that goes into a class, the networking, the questioning, the kind of learning from each other. And that promise very quickly fell apart. And soon Coursera and the other online course became, you know, became parts of MIT or Harvard offering their regular lectures online but not as a replacement. But what really allowed me to start sharing more was when YouTube started to mature as a platform. So early on, I started converting my lectures into YouTube. Daniel: But the advantage of YouTube is a very simple technical one, which is because it adapts to whatever your Wi-Fi strength is, it doesn't get caught up in trying to deliver at the same quality for everybody no matter where they are in the world. My audience is all over the world. They're in parts of the world where the internet speed might not be great, and YouTube adjusts for it. It really didn't take much work for me because I'd teach a class, it got recorded. By now there are cameras in the classrooms, so I would get a recording. The only thing I had to do was convert that recording into a video file and then into YouTube. So it's like 20 minutes more after every class, which to me seemed like a small enough investment to make for people to be able to watch those classes. It also meant that people in the class, if they missed the class, had an easy way of accessing it if they'd gone home for a family occasion or gone to another country for an interview. So it filled a lot of needs, but I was really not thinking about, you know, how many followers do I have on YouTube? I just put it out there and people watched it once, so it wasn't a big deal. So my social media presence has almost grown by accident, which is there's nothing I do. In fact, there are things I do which actively undercut how many followers I have. I mean, everybody knows an 80-minute video on YouTube does not draw as many viewers as 8-minute videos or 4-minute videos. Daniel: And I've never gone that route because it's not the way I teach. I'm not going to change the way I teach substantially just to get to be a YouTube presence. So that created the 2008 September. I know the date was September 21st, two weeks into that 2008 crisis. I created a Google blog. I didn't even know what a blog was when I created it. It was Google Blogger. I basically went in and wrote about what I was feeling at that moment in terms of uncertainties. It became almost a diary where I put in what I thought about what was going on and how I would try to deal with it in corporate finance and valuation. And that blog built up over the next 6, 7 years. Again, I had no intent when I started the blog to go out and seek blog for. I didn't even know the process of getting the blog out there. It just was accidental. It got spread by people who read it and passed it on to other people. But by 2015, there were enough people reading the blog that I knew quite a few people were getting their information about what I was doing from the blog, not from my YouTube videos. 2015, I decided to take every single blog post I wrote and make a YouTube video of that blog post. And I did it because I was discovering that people didn't have the patience to read anymore. Even though it took exactly the same time to read the post and watch a video, 4 to 1 in terms of the number of people who watched the video as opposed to read the post. So I said, again, it cost me very little to create a YouTube. Daniel: So since 2015, I've been creating YouTube videos on my blog post, which also go on my YouTube channel in addition to my classes. In fact, there are far more blog post videos than classes because I have hundreds of blog posts on which I have videos. And those got traction as well. Again, because I was writing about what was happening in the market. So there's an IPO, you know, the Facebook IPO. I did a valuation ahead of the IPO. So people were interested in watching the video because it was in the news, something that they were interested in. Matt: That's fascinating, Daniel. It sounds like a very strategic way to get your content out there. Daniel: But I stayed with what I did, which is I'm not a news blog. I don't pass opinions. I am here to kind of take what I know about corporate finance and valuation and kind of put it into posts and videos. So I've kind of stayed with that niche, which is part of the reason I haven't tried to create a monthly video or a newsletter because if I have nothing to say, it's better not to say anything at all. Why add to the noise by writing about something when it's obvious or something that is not a place where I'm going to add something to the conversation? So basically, the Google blog picked up numbers. The YouTube videos picked up numbers. And I've used Twitter since 2009, not to indulge in Twitter debates, which I think are extraordinarily destructive, damaging places to be, but to kind of let people know. I found Twitter to be an extremely convenient platform to let people know that I post. So I'd write a Google blog post. Daniel: But I would then put a tweet out saying, I just wrote this post and this is what the post is about because it would alert people to what I had again. That number built up because, you know, as I was doing this, because there were people reading the posts and then saying, okay, I'm going to follow for that place. In 2020, I started to worry about the amount of material I had on Google. I've written 3,000 pages of blog posts. My blog posts are really, really long. They're like a chapter in a book. I had thousands of pages. They were all on Google blog. And on any given day, Google could say, your blog is banned. all off for whatever reason, you know, I'm not, there's no conspiracy theory. I'm completely, I realized I was completely at the mercy of Google deciding whether to keep the blog on or not. And if they chose to take my blog off, all those posts would disappear into thin air because I don't have a real backup that I could put back on. I can download the blog backup, but it's really not something you can recreate. So in 2020, I created a substack account and I said, you know what, I'm doing it not because I want substack followers, but because I want this blog post to be in at least a couple of places. So if Google decides to take my blogging privileges away and block my blog, I have the post somewhere else. That was my original intent. And once I posted on substack, people said, well, we're not on substack. It's kind of a, it's a different platform. Daniel: Why don't you post it on LinkedIn? So everything you see that I post on LinkedIn is actually third, it's a third posting of the same post. I don't write on LinkedIn directly. I write my Google blog. I copy it to substack. I copy it onto LinkedIn. There's almost, I don't think there's a single post on LinkedIn where I went to LinkedIn and said, I want to write something just on LinkedIn. It's just the third copy of the same post in three different places. And the reason I chose LinkedIn was it draws a different subset of people. And I said, because there's a lot of noise in the general platforms and people who shouldn't, I mean, who really don't understand stuff who might read something and react to it, not because they're mean, but because they really don't understand it. LinkedIn seemed to be a more curated audience. And it's interesting because I get feedback on my Google blog. I get feedback on my substack posts. I get, and it's interesting to see the mixture of audiences reflected in the kind of responses I get to a post. So all of these are really about getting content out. None of them was designed with the intent of going out and saying, look, I want a hundred thousand followers, you know, followers on Twitter. I don't want a half a million people on YouTube. I want, I don't even know what the equivalent is. Matt: Was it? I mean, when I first went on LinkedIn, I knew so little about the platform that I accepted every connection request that I got and I got to 30,000 in like two weeks. And then they wouldn't let me add connections because they said you've hit your limit. So I don't even do connections anymore because I've hit the limit. I can't do much about it. But it turns out that LinkedIn has this other dimension to it and it's developed over, especially over the last decade where people read stuff you do. So that's pretty much my, I'm not on Facebook. I don't have an Instagram account. So basically my social media presence is almost accidental. And to the degree that's built up numbers over time, I'm thankful, but I have mixed feelings about building numbers on social media and how it might feed back into content. My nightmare is that I write because I want more followers and I never want that to be the case. Daniel: Aswath, your perspective is like a breath of fresh air, especially in today's day and age where it feels like there's a increasing amount of individuals who are looking to grow for the sake of growth. And it's obviously not as black and white as that sounds, but specifically for you, you know, your rise on social media was largely attributed to the classes that you were posting online. And I myself, as someone who studied finance at Georgetown, also learned under your curriculum, which was taught by one of your graduate TAs, Katherine Waldock. Daniel: And it was immensely helpful with landing a job on in investment banking later on. Do you think that more academics or people from academia should be posting their work online? Matt: I'll tell you, I'm incredibly lucky because I have nothing to lose. I have nothing to lose to the point that when you don't have anything to lose, your bargaining power goes up. And I'll explain what I mean by that. NYU technically owns the classes I teach in my NYU classrooms. Technically, they can say, you cannot post that to the public. You need an NYU ID and password to be able to watch the class. Technically, they could. And I knew that right from the beginning. And I knew I was walking this very very, very fine line between, you know, taking NYU property and sharing it with the world and kind of sharing my teaching. So early on, I made two decisions. One is that I would never monetize any of this stuff. So that takes away a big factor they can use in stopping you because the minute you start monetizing things that the university thinks belongs to them, they want to share. So I said, I'm not monetizing. This will always be free. It'll open access. Anybody can download. The other was I took advantage of the mission statement. You know, what every university's mission statement claims that its core mission is, right? Even though it's a complete lie. What's the core mission for Georgetown or NYU or any university? It's education, right? I said, look, your mission is education. Daniel: All I'm doing is taking your mission and providing it to parts of the world where people might not be able to get an education. It's not that, you know, because their response is, well, this might cut back on the number of people who come to NYU. That's not going to be the case. A Malaysian equity research analyst, or last week I had somebody from the Ivory Coast, an equity research analyst. He makes $200 a month as his monthly salary. He's not coming to NYU, but he was able to take my classes. So I took advantage of the mission statement and the fact that I wasn't monetizing early on. And I've always believed in do things first, ask for permission later. So I put it online and I said, I dare you. I dare you to tell me to take it off because if you do, I will, but I will let the world know why I took it off. So we have this very sensitive setup and it's a setup that I kind of honor, which is I will share my material. NYU is welcome to make money on my material. They make money not just when I teach in the classroom, but I've created three certificate classes for NYU, which take the same content I have in my free online classes. I've made slightly more professional versions of the videos and I've given them to NYU. They build classes around it. I do Zoom sessions, these classes once every two weeks, one hour every two weeks. And NYU collects a certificate fees. Daniel: And if you ask me, why would somebody take the certificate class as opposed to the online class? I'm perfectly open about it. It's not for the additional knowledge because you can get it for free on my site. It's because you want a certificate. I don't have the bandwidth to give certificates for my free classes. I can't give exams and grade them. And I give that to NYU. And I say, look, I will give that all to you on one condition, which is I will continue to offer the online versions of these classes for free. And if you stop that, then I'm not teaching the certificate class. I mean, it sounds like I'm blackmailing them, but effectively, it's a quid pro quo. I will do this for you if you do it for me. So I've used that arrangement. Not too many faculty will be able to have that power to be able to do that. So when faculty don't share their classes, it's often because at this point in time, if you go to university and say, can I share my class? They're going to say, why don't you make a certificate version so we can make money online by creating this class rather than you giving it away for free. So if a faculty member can share his or her classes and the university doesn't make it, I think you should because I don't think... I mean, there's nothing secret or magical about what I'm talking about in the classroom. There's no secret sauce. So from that perspective, I've never had any qualms about sharing the material and I think people who can should share it. Daniel: That said, though, only about a quarter of the people who are my followers on YouTube come because of my classes. Three quarters come from my blog posts. My blog is the big driver because as I said, it is an unusual blog. It's really long blog posts, usually about something in the news. So in the next few weeks, I'm going to write about this Paramount, CBS, the whole dance around the merger around Paramount. And I'm going to write from the perspective of this... It's a real-time case. This is what I think about the players. This is what I think should happen. It's my opinion, but it's based upon something that's in the news at that point in time. One of my most read blog posts last year, and it probably drew added to my YouTube numbers by 20,000 people, was when the tariffs came out in early April. The tariff announced in the market collapsed. I said, hey, here's where we are in markets. We're in a period of maximum uncertainty. Nobody knows what's going to happen. But let's develop a framework for thinking through how this will play out. So one of the ways I think people, one of the reasons people come is they get a real-time perspective from somebody that they view as not having an agenda. And that's key. You know, I don't work for an investment bank. I don't work for a hedge fund. I don't consult. I've never consulted in my life, so I don't do consulting. Daniel: I don't do any of this stuff where people have to stop and say, well, why is he telling me Tesla is overvalued? Does he work for a hedge fund that's sold short? So I would hope that people at least see that they can disagree with me, but they should disagree with me on the material. It won't be because I have some hidden agenda that I'm trying to push to the front. And I think that's helped in terms of building up readership and people who watch this, is they know that they might disagree with me. They don't agree with everything as Henry expects them to, that they also know that I have no other agenda. And in the world we live in, the world you talked about, there's always seems to be another agenda. I don't monetize any of my social media. I have what, 450,000 people on X. I don't receive a dollar from X. I don't even try. I don't monetize any of my YouTube videos. Even though somebody is making money, there's an ad that runs ahead of my YouTube video. I think Google collects that revenue. I don't get any of it. By not monetizing it, I can... It's both for my... For the perception of being fair, and also for my own self. Because the minute you monetize something, no matter what people say, money is an insidious way of entering into the process and altering the way you write and think. And I don't ever want that to be the case. In the same way, when I talked about my data updates, that's something I've been doing for 33 years. At the start of every year, I update data. Daniel: People use it all the time. My equity risk premiums last year, I was the biggest source of equity risk premiums for analysts around the world last year. I've never made a dollar on my equity risk premiums. I don't want to. But by having no commercial entity attached to it, I get the advantage of doing what I want and being answerable to no one. It also means that I can say what's on my mind. I've said some terrible things about ESG, and I won't take a single thing back. But I wouldn't have been able to say it if I'd had arrangements or connections to BlackRock or Goldman Sachs or McKinsey, because they all have incentives in this game to make money of ESG. So by not having those commercial entanglements, I can say what's on my mind. You might agree with me, you might disagree with me, but at least I hope that people realize that I have no agenda to push here. Matt: Aswath, that was so well articulated. And what really stands out to me is it feels like your motivations for writing on your blog and posting across all these platforms is very... I don't know if it's not accurate. It's not altruistic, right? I mean, I think you're thinking, I am no Mother Teresa, right? I'm not doing this for the goodness of the world. I don't want to do it. I do it because it costs me nothing to do it. As I said, 20 minutes after every class. Daniel: And when I think about things I do in my life and the return on investment that I do, the return on investment that I make in terms of hours saved from somebody not having to do something because they looked up that number, that's insanely high. And here again, I'm incredibly lucky. I make more than enough money to have everything I need. Nobody has everything they want, because that's... And everything, what exactly am I going to do with that additional money? What do you think motivates you to continue writing the blog? Is it a pure enjoyment or the learning or... Staving off dementia. Because the reality is the minute you let your mind go to waste, then you're asking for trouble, right? So I enjoy thinking about problems. I enjoy thinking about puzzles. I enjoy updating my data. I enjoy playing Moneyball with the data. So I'm incredibly lucky in that sense as well. There's nothing I do which I'm required to do. That's why I don't write. You know, I got a call. I got an email from somebody in LinkedIn saying, it looks like you're getting a lot of engagements on your post. Why don't you write a monthly newsletter? And I said, I'm not doing it. Why? Because if I have a monthly newsletter, I've got to write one post every month, which I probably would do anyway. But the minute it becomes a monthly newsletter, I'm now going to have... I write that post whether I want to or not. Daniel: And you know what? At this stage of my life, there's nothing I want in my to-do list that I have to do because somebody requires me to do it. Perhaps the only item there on my to-do list that I have to do that I don't like doing is grading. And that's part of my teaching. I can't run away from it. I've never liked it. But it's from that perspective, there's, you know, I do this because I enjoy doing it. The sharing part just comes at the end. So I'm not sitting down saying, I'm creating this dated check, create this data because I'm going to use it for the rest of the year. Those cost of capital I compute by sector are cost of capital I use during the rest of the year. And that's why I said it's costless for me to share it. Once I've come up with it, what difference does it make that I keep it for myself or share it with the rest of the world? So the sharing part is not what's driving the process. It's the writing, the updates, the analysis part that gives me joy. The sharing part is just the last step in the process. Aswath, I want to refocus on LinkedIn. Earlier, you said something that struck me, which was the LinkedIn audience feels a little bit different than the audience on some of the more mainstream platforms. Can you just talk a little bit more about what you mean? Matt: Well, most people who joined LinkedIn joined because they're business people looking to network and create connections. So already you're not getting... Matt: So if I did a sample sampling test, I would wager the audience on LinkedIn is more business-focused and often more in finance than the rest of the world. And that's the space that I write in. So it's not that they're smarter or better than the general public on a different platform. It's just it's a focused audience because LinkedIn was created for people looking for jobs. Now, over time, it's grown to be more than that, but that's its starting point. It's still reflected in the composition of the platform. So you're less likely to get the kind of casual comments you sometimes get. I mean, I'll give you an example. Seeking Alpha, I mean, my blog posts are carried by like 12 different of these services that claim to be finance news services. Now, when my post gets reproduced on Seeking Alpha, you get comments. And clearly, it's a very different audience. I won't characterize it, a very different audience than the audience of people who come to my blog or the audience of people on LinkedIn. And I can tell from the comments. So I hate being in social media debates. In fact, I almost never comment on a comment. So if somebody comments on a post and asks me something which is informational, I will respond and say, look here. But if somebody contests me, I don't contest them back on LinkedIn because I don't think good things come from having food fights on social media. So I am very open about the fact that I will post and I will let you comment. Daniel: That's interesting, Matt. So it's more about curating the conversation in a way that's beneficial rather than engaging in disputes? Matt: And if I'm not responding, it's not because I think less of you or I don't think your comment has substance. It's because I don't think the forum for debating that is on social media. So the way I treat LinkedIn is the way I treat almost all of my social media. But the audience means there's fewer comments that I have to go censor. Let me put it that way. YouTube, for every comment, there are five comments that are either scams or comments that are coming from people who basically didn't even watch the video. They just reacted. I don't like you. Here's what I think. And I don't want to be dealing with that. I mean, it's not, you know, that part is no fun for me. And LinkedIn probably creates less noise in the comment section than any of the other platforms. The Substack is pretty good, too, because there are people who subscribe to you because who you are. They kind of self-select. The Google blog and YouTube are all over the place. In fact, I think I've turned off my comments on Google blogs simply because I got tired. Because for every comment, there were 10 comments which were marketing scams and people entering in trying to get money from other people. So finally, I just, you know, I just said, I can't deal with it. So I turned off the comments, not because I don't believe people have interesting things to say, but because I have to dig so deep to get to the interesting stuff that it's not worth my time. Matt: Earlier, you were talking about the arrangement that you worked out with NYU. An implicit arrangement. It's not actually an explicit contract. So it is an implicit arrangement that I don't like to mess with. I get the sense, Aswath, that you are a pretty resourceful and creative guy. Now, it almost feels like if I was... Hypothetically, a professor today at a U.S. university, and maybe I had the desire to share my work online or some of the teachings that I was giving to my students in the classroom, what would be the best or safest way to go about that while still being able to share education with the world? Daniel: Safest in the sense of backlash from the university? The safest as in what you get by posting the material? So I wonder, I want to figure out where the danger is coming from, what is the danger you're worried about. Matt: Maybe the university shuts down whatever activity you're doing. Daniel: That's a fair enough. So basically, I wouldn't advise a young assistant professor to go out and mess with this in terms of sharing material without permission because they're far more loose, right? The young haven't got tenure. So I think I would tread carefully about what I, and I would probably look at other faculty to see how far they pushed the limit, because then you can do the same thing without ask promotion and say, I just modeled myself on the senior faculty member and I did what I did. Daniel: So if that's the danger we're talking about, you know, the minute though you start to share that material and try to monetize it, then you're in danger. I think that's the line you've got to be careful about crossing because then you're putting a target on your back. And the university, rightfully, will come after you, right? Especially if it's class, you are an employee of the university. You're in a classroom. Technically, what you do in the classroom is part of a university job. And if you're now making a side, you know, side income from doing that. So people do that. Technically, consulting is that, but you've got to physically carry yourself. Then I think you need to think seriously about the kind of backlash you're going to get. So if you're going to do it, do it because you want to share your material, but recognize that, you know, you have to learn how people learn online before you start trying to teach online. I mean, let me tell you, when I first started, I used to put my entire 80-minute lectures, as I said, online. And because I expected people to be able to do online what they did in my classroom, sit down and watch my lecture, listen to my lecture for 80 minutes. It turns out that it is incredibly difficult to watch an 80-minute lecture on your computer or on your iPad. It is a big difference between being in a physical classroom. Daniel: And, you know, that's why about 15 years ago, I took every one of my classes, my 80-minute lectures, and I said, If I had only 12 minutes to deliver this class, how would I do it? It was actually a very good exercise. It made me a better teacher in my 80-minute classes because it kind of crystallized what mattered and all the fluff we throw in with an 80-minute class. So I created 12-minute lectures of each of the classes. So if you look online, not only do I have my regular classes online, I have versions of the class that I've created with 12-minute lectures for people who don't have the attention span or the time to watch 80-minute lectures. And those are online, purely as online classes. Those are the classes that NYU has made into certificate classes. But it came from learning how people learn online. The other thing about online learning is it doesn't stick if all you do is watch a video. You've got to build on it. So over time, I've started adding stuff to my videos where people can take after the class, test where they can check to see whether they understood the material, work through exercises. It's work. Now, I'm not going after people who want to watch a video and know how to do valuations. I don't think you can do that. You can watch the video. I can get you started, but it's a start. Unless you're willing to do the rest of the work, it's not going to work like a class will. Daniel: So I've tried to do that online, is not just put the videos on, but create the supporting ecosystem for you to take that video and make it into something that sticks as learning. I really like that concept of taking an 80-minute lecture and then thinking about how would I deliver this message and the key points if I only had 12 minutes. Because it feels like in today's day and age, as I'm sure you're noting, attention spans are getting shorter. People are flooded with so much information constantly. And like it or not, a lot of people just simply cannot sit through an entire 80-minute lecture. Matt: So if you're able to distill your ideas and teaching into a 12-minute video instead that gets, say, 500,000 views on YouTube... That's gonna be far more effective. It's a very good test of whether you truly understand a concept. The more you understand a concept, the less time it should take you to explain the concept. That's my very simple test. So if it's taking me 60 minutes to explain something, it's because I haven't quite grasped the concept at its heart. Daniel: So that's what taking these long sessions and making them into shorter sessions does. It forces you to crystallize what exactly is this that I'm trying to teach? What is it at its core? And when I struggle with that, it's because I'm struggling with my own understanding. So it's become a very good test of what I understand and what I'm still struggling with, is whether I can compress it. Now, my... Daniel: You know, my ultimate endgame is, I hope to be able to get an 80-minute lecture into three or four minutes, because the more I work with a concept, the less time I can explain it in. The reason I put the three or four minutes, I don't know what the limit on TikTok is. What's the longest video on a TikTok? It's like four minutes. One of these days, I will have a TikTok version of my YouTube videos, and you could take corporate finance in 28 TikTok videos. Now, I'm not there yet. I'll do it when I'm ready, but I think that, again, I'm doing it not because I want followers on TikTok, but because it's a subset of people who can learn only in four-minute videos. And some of them are my grandkids, because they're getting their messages in shorter and shorter punches. So I've got to live in the world that I'm in, not the world I wish to have. I'm surrounded by professors who complain about shorter attention spans and how nobody wants to read anymore. And I too can join in and complain, but what's the point? People are reading less. They have shorter attention spans. I've got to teach to that audience rather than teach the audience I used to have in 1988 and complain about the people in 2025 not getting it. So to me, this has also allowed me to kind of adapt to my changing students. And I attribute it to having to create these YouTube videos, which are shorter, because it made me think about how would I deliver this message in a punchier way. Matt: Aswath, I think that's one of the reasons that you're such an effective educator, is because you're willing to change the format or how you're delivering the message to match whatever at the time is the most effective delivery mechanism or how people like to receive the classes. Because you could still be doing 80-minute lectures today if you had never changed from how you're doing it back in the 80s. But the fact that you're talking with me and saying, there's a world where we're gonna see Aswath Damodaran TikToks teaching people about corporate finance is incredible. And I can't wait to see that content. And I know a lot of people will get a ton of value from it, including your grandkids. But so the message matters and the audience matters. So basically how I teach is always adapted to the people that I teach, because I teach valuation to CEOs. I teach them to equity research analysts. I teach it to VCs. I teach exactly the same content, but the way people, what people get out of it is gonna be a function of what they bring to the table. And that's true for all my videos as well. What people get out of the videos is a function of what they bring to the table and what work they're willing to put in on their own. Because I can't carry them over the finish line and I shouldn't be. I also want to get your perspective on something that I feel you are well-placed to talk about, which is social media and financial markets. Daniel: So social media has almost increased the speed at which information can spread. As I'm sure you're well aware on places like Twitter. It increases the speed with stuff can spread. Some of the stuff is information, some is rumors, some is misinformation. So that's, I think, a key part of the story. And the reason I kind of interrupted is, I mean, here's the contradiction that we're trying to explain. We have far more access to resources, investing resources than ever before in history. We have far more access to these investing advice, podcasts, new information than ever before in history, right? So if I stop right there, you have more data, more information, more podcasts on how best to invest. And I said, what should this lead to? You're going to say, well, that should make us better investors, right? And here's the contradiction. I think collectively we're doing worse at investing today than we did 40 years ago. Matt: Say more. Daniel: And that's my worry with social media, is we're getting this flood of stuff out there. And it's getting more and more difficult to separate the stuff that matters. The stuff that does the good stuff from the bad stuff. That's why I use the version, Gresham's Law. Gresham's Law goes back to 300 years when at that time England adopted the gold standard. Isaac Newton was actually the kind of person they picked. And it was based on gold and silver, but they set the gold to silver ratio too low. Daniel: So what happened was, the bad money, silver, drove out the good money. Everybody converted their money into gold and put it into their... and they used only silver. And from that was born Gresham's Law. And we have a version of Gresham's Law in social media, which is there's so much stuff out there, but the bad stuff often drives out the good stuff because it's driven by engagement farming, by trying to get followers. And that's, I think, the insidious part of having social media become the place where you build a celebrity profile. You're going for a million followers on YouTube. The way you do it is by saying outrageous things that are terrible advice, but outrageous. You draw an audience, right? So I think that it's something I worry about because I think as you know, I tell people to read less, listen less, think more on their own. Because we're filling every minute of our time with somebody else's thoughts, well thought through or not, about every topic, right? You go for a walk, what do you do? You put your, you know, AirPods in and you listen to somebody's podcast on some topic because you feel I want, I don't want to waste this time. I want to be productive, so I should be reading. I should be listening. When in fact, your most productive use of your time is to actually do nothing. Daniel: Let your mind kind of, I mean that, I do, when I'm almost every single one of my blog posts was born on a hike or a walk where I had nothing to do and my mind is kind of, you know, thinking through these things. Things are marinating in your mind, different ideas. And one of them gets ready. It starts to write itself. And I don't think we're giving our minds enough time to do that because there's so much stuff out there to fill every minute of every day that we think is making us better at what we should be doing, which is investing. Matt: That's incredible. And I completely agree with what you said about the Gresham's Law, you know, bad money drives out the good money parallel in social media where the bad content, the engagement farming focused content, which often has less substance or original thinking in it, is driving out the better content. Or sometimes it's complete, it's basically based on lies, right? Because engagement farming often is to shock people to the point that they want to react to you. So you make up something that is outrageous, but provocative. You're going to draw more engagement than something that is factual and not as provocative. Daniel: So I think that, you know, that's one reason why, you know, to me, the no, I'm flattered that I have almost a million followers on YouTube. I'm flattered. I'm at 920,000, so I should probably be tracking when I get to a million. I'm sure I've heard that YouTube sends you something when you get to a million. Daniel: I don't want any of that process. And it basically, and I do it not because I don't like having more followers. I like people to follow me, but I want them to follow for the right reasons, which is not that I'm going to tell them what to do in markets or make them money or make them rich. It's because there's something I'm doing that enriches their thinking so they can think through their own answers to questions, because that's what teaching should be about. It's, you know, the old saying of, you know, you give somebody fish, they eat for a day. You teach them how to fish, they can eat for the rest of their lives. I'm all about process, a way of thinking, and I hope my YouTube videos give people a window into how I think through answers to questions because they can then develop their own thinking and a way of coming up with answers to their own questions. Daniel: Do you think that any of these social media platforms can do anything to prevent this Gresham's Law effect from happening, or is it just inevitable? Matt: I think it's inevitable. I don't see a way, because the problem is once, you know, the only way you can do it as a platform is the platform then has to not care about numbers. You see what I'm saying, right? I mean, you have to have a platform that's restricted, that's a folk, so it's, you know, it's like having an online class. You want to curate the people who come into the class, not open it up to everybody. Daniel: But unfortunately, platforms make money on either advertising or subscriptions, and they become more, more valuable if you have more people on them. So this whole process of numbers is not just at the engagement level. It's all the way to the platform level. I mean, look at how, you know, OpenAI and xAI are competing, right? They say Grok is being used more than ChatGPT. Whether it's used well or not, it's kind of irrelevant in this process, right? It's all about numbers. And that means a platform. And so I don't expect YouTube to come in and curate stuff for me. I understand. I'm grateful to Google that they gave me a platform to share stuff. I don't expect them to be the policeperson on this platform. Matt: I think it's inevitable with these platforms. You're going to get good stuff. You're going to get bad stuff. You're going to get neutral stuff, all of it mixing together, which means that it's caveat emptor with people who watch these videos or read these substack or whatever blog posts to separate the good from the bad. And that's why I said you need to think for yourself. It can't be what somebody else thinks, no matter how, you know, you can hold them in high esteem, but they don't own the mountaintop, right? They don't have the monopoly on the truth. You've got to be willing to listen and say, I don't agree with that. Here's what I think about it. Matt: How can a young person today, if you think about even your grandchildren as they grow up in this world of an overload of attention, AI-generated slop, how can they develop that independent thinking that is so important? Are there certain things that they should focus on? I mean, I think they need to hang out with other people who are interested in engagement, engaging conversation, right? Daniel: The problem is we self-select. We self-select the peer groups that are fun to be with. Often they will end up. I mean, there are forces that drive you towards being part of the group, right? So I think it's tough. I mean, I worry about my grandkids because I can't tell them how to do this. It's almost has to come from within. I mean, you got to be comfortable with who you are. And I think we live in a world where people are more and more uncomfortable with who they are because they see so much around them and people who look more successful, look more happy, that they're so interested in being somebody else that they can't look within. And I don't know how you can force people to do that. It's got to be intrinsic. It's got to come from within. So all you can do as a parent is to try to encourage that kind of behavior, which is, hey, don't judge yourself based on what other people think about you. Judge yourself on what you think about yourself first because if you don't think well of yourself, it doesn't matter how much esteem the rest of the world holds you in. Matt: You're going to get yourself into trouble. That's very wise of you, Aswath. As you think back to the past couple of decades, have there been certain moments or specific periods of your life that really helped you to develop this mindset and independent thinking, self-esteem, that kind of thing? Were there certain moments that you can think of? Daniel: I'm not sure what happens in your life is incremental. It's one piece of advice I give my kids because they want to make big changes and they want to do it quickly. And then they don't succeed and they beat themselves up. I said, do one small thing every day. And it's amazing how things build up. I'll give you as an example. You take my website. It's got hundreds and hundreds of things in there. People say, how do you build this webpage? It looks like so much work. It was done over a period of 35 years by adding one thing every month or one thing finessed every month. And over time, it's amazing how much you can develop if you're willing to take things incrementally. So my advice to people is don't try to do this all. Don't make a new year's resolution this year. I'm going to be an independent thinker. It doesn't work that way, right? The way this works is tomorrow when you read a new story, try to do some independent thinking. It might just be five minutes or 10 minutes, but you're going to see these things add up over time. Daniel: And the sum of these small incremental changes will be far greater than trying to be a revolutionary and change everything overnight over a short period. So what I'm hearing is that the consistency of incremental actions is more important than trying to achieve a step function change in progress in a short amount of time. Matt: Right. Exactly. Daniel: That's incredible advice, Aswath. As you think about, you know, looking ahead into the next five to 10 years, do you see the social media platforms continuing to move in the same direction that things have been trending with more and more engagement, heavy engagement-focused, maybe even rage-bait style content that... Matt: AI is going to be the ammunition that dries that war, right? I mean, I'm, you know, I'm half the post now. I'm not sure if it's a real person or an AI bot making a post. And there are many people whose posts are being curated by ChatGPT. I'm not sure who's writing the post. Is OpenAI writing this post or are you writing this post? So I think AI is just going to put this on steroids. If you think you've had trouble for the last decade, the next decade is going to be far worse in terms of all of this noise and disinformation because of what's coming. Daniel: Are you familiar with the dead internet theory, Aswath? Matt: No. Daniel: It’s essentially similar to what we've been talking about with the idea that at a certain point, I'm writing things that are ChatGPT generated. And then someone is commenting with a ChatGPT generated comment. Daniel: And essentially, it's just AIs talking to each other instead of real people. Do you think we're headed towards that? I think we are, right? And I think our thinking is being driven by it, right? You send a message on your iPhone, AI steps in and says, do you want me to rewrite that message for you? And it's so convenient. I mean, we've traded so much of what makes us human for conveniences, right? And I think in a sense, we're bearing, we're harvesting the results of that. Is much of what we complain about today, we gave away 5, 10, 20 years ago because it made our lives so much easier. I mean, so I think in many, you know, this is this is why I am far more cynical about the net effects of any of these big disruptive things. When the AI advocates talk about how the world is going to be a better place 10 years from now with because of AI, I'm not so sure because every time you get one of these disruptions, you look back 10 years later, the net effect has been closer to negative than positive in terms of what it does for our lives in terms of making us happy and more fulfilling lives. I don't think any of these disruptions have created that net positive effect that they promised. Aswath, this has been a fascinating conversation. Daniel: Before we wrap it up, is there anything that we haven't talked about, whether it's related to your work or LinkedIn, social media, markets, that you want to share with the audience? Anything at all? Matt: Yeah, I mean, the only thing I want to say is that I'm a complete novice on all of the bells and whistles on all of the platforms I'm on. I know how to post my videos on YouTube, but beyond that, I know very little about YouTube and increasing numbers, making things more watchable. I mean, I didn't even know what a thumbnail was until somebody explained, this is what people will see when that video is out there. I said, why would that matter? I mean, that to me, I use these platforms because they're convenient. I don't use these platforms to change the way I communicate. And hopefully the same thing applies for you. Social media is something that you use rather than you becoming a tool for social media. And I think it's a very powerful medium in terms of gaining power over you. And you've got to be careful about how much power you give it. Daniel: Well said. Thanks for coming on, Aswath. Matt: Thank you.