Posts

Valuing the S&P 500: Pre and Post Virus

In a previous article, I presented a rough approximation to help illuminate how the Covid-19 outbreak might affect the value of American stocks as represented by the S&P 500 Index. …

Dissecting Volatility

It is one thing to say that the market is volatile.  It is quite another to appreciate fully what that really means.  So let’s spend a moment to dissect volatility….

Assessing the Trade-off (Video)

Prof. Bradford Cornell and Andrew Cornell of Cornell Capital Group LLC in a rountable discussion of the trade-offs in the coronavirus crisis.

Featured Publication

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The Big Market Delusion : Valuation and Investment Implications

December, 31  2019 // Bradford Cornell and Aswath Damodaran

There is nothing more exciting for a nascent business than the perceived presence of a big market for its products and services, and the allure is easy to understand. In the minds of entrepreneurs in these markets, big markets offer the promise of easily scalable revenues, which if coupled with profitability, can translate into large profits and high valuations. This paper examines how the “big market promise” affects business formation and financing and focuses on the role that overconfidence on the part of entrepreneurs and their financiers (venture capitalists and public equity) plays in creating a collective over pricing of companies in alleged big markets.