As we approach the turn of the calendar year, I have my own set of rituals that prepare me for the new year. Last week, was my data week, where I download and analyze data on all publicly traded companies, listed anywhere in the world, and I will post extensively on what the numbers look like after a most tumultuous year. I also start thinking about my passion, which is teaching, the spring semester to come, and the classes that I will be teaching, repeating a process that I have gone through every year since 1984, my first year as a teacher. And as always, I invite you come along for the ride. 

What I teach...

For a class to resonate and be remembered, it has to be more than a collection of topics, and with each of my classes there is a core narrative that animates and connects the class sessions. If you were to ask me what that narrative was for each of my classes, here is how I would respond.

1. Corporate Finance: Corporate finance is the development of the first financial principles that govern how to run a business. It is that mission that makes corporate finance the ultimate big picture class, one that everyone (entrepreneurs, investors, analysts, business observers) should take. If it looks like I am over reaching, I start my corporate finance class with the simple proposition that any decision that involves money is a corporate finance decision, and by that definition everything that businesses do falls under its umbrella. To make this operational, I build my class around my big picture of corporate finance:
   
   
   I tie every session and every topic within each session to this big picture, and while I am willing to and often do abandon models and theories, I am loath to compromise on first principles. Thus, you and I can disagree about whether beta is a good measure of risk, but not on the principle that no matter what definition of risk you ultimately choose, riskier investments need higher hurdles than safer investments. I end the class with a corporate finance version of valuation, where I tie inputs into value (cash flows, growth and risk) to investment, financing and dividend decisions. 
2. Valuation: It is unfortunate, but for most people, the vision that comes to mind when I say that I teach valuation is excel spreadsheets and high profile company names. Don't get me wrong! I find Excel to be a solid tool in my arsenal, but I am not only old enough to have valued companies with a ledger sheet and calculator but also wary of letting a tool drive my valuations. If you do take this class, you should recognize that I will almost never open and work with an excel spreadsheet in class (though I do have supplemental YouTube videos on using them in analysis) and my interest is in valuing just about anything, not just large public companies.
   
   
   
   In fact, there are three key themes that I emphasize through this class. 
1. Price versus Value: The first is that we need to draw a contrast between valuing an investment and pricing it; the former is driven by fundamentals (cash flows, growth and risk) and the latter by demand and supply (with mood, momentum and liquidity often dominating fundamentals). While intrinsic valuation models try to assess value, pricing is built upon what others are willing to pay for similar investments; in the context of stocks, using a PE ratio and a peer group to attach a number to company is a pricing, not a valuation. 
2. Value = Story + Numbers: The second is that a good valuation is a bridge between stories and numbers, where every number that you use in a valuation, whether it be expected growth, margin or discount rate, has to be built around a story about the company, and every story you tell about a company (its amazing management, its superior platform or loyal employees) has to show up in a number. I will confess that, as a natural number cruncher, it too me a while to learn this lesson, and I try to pass on how I moved up (and continue to try to do better) the learning curve.
3. Face up to uncertainty, rather than avoid or deny it: Uncertainty is a feature of investing/ business, not a bug. One of my biggest issues with old-time value investing is that it viewed and continues to view uncertainty as something to be avoided as much as possible, and takes the view that you cannot value investments, where there is too much uncertainty. That view has led value investors to focus on mostly mature companies and kept them out of the game of investing in young and growing businesses. I take the point of view that uncertainty should not stop you from valuing companies, that your value estimates will have more error in them, but since the market also faces the same uncertainty, your best bargains may be in the midst of uncertainty. It is for that reason that I spend large portions of this class valuing difficult-to-value companies, in what I call the dark side of valuation.
3. Investment Philosophies:  If my classes were children, this class would be my neglected one, since I have never taught it in person at NYU, but it is a class that was born out of an observation. There are only a few investors who have consistently beaten the market over time, and many of them are legendary, but people within this small group are extraordinarily diverse in terms of how they think about markets and investing. That tells me three things. The first and obvious one is that there are no easy ways to beat the market, and anyone who claims to have found one is either lying or heading for a letdown. The second is that the notion that there is only one pathway to investment nirvana is hubris, and that there must be different philosophies that can be successful. The third is that since many of these successful investors have been widely followed, just copying what they do must not work, or we would observe far more imitation Buffets and Simons,  who are successful. In this class, I try (and that is all I can do) to provide a full menu of investment philosophies, starting with technical analysis/charting, moving on to value and growth investing (in both public and private forms), and then on trading on public or private information. I close by looking at bookends of the philosophies by looking at arbitrage, where investors chase (and sometimes catch) the dream of guaranteed profits and indexing, where investors come to an acceptance that stock picking does not work.
   
   
   With each philosophy, I look at strategies that emerge, the historical backing for whether these strategies work and end by looking at the make up that you would need as an investor to be able to succeed with that philosophy. By the end of the class, my objective is not to sell you on the best philosophy but to provide you with a framework where you can find the philosophy that best fits you.

1. Stern NYU classes: The first, and the one with the deepest roots, are the classes that I teach at the Stern School of Business at NYU to both MBAs and undergraduates. I normally teach these classes, in person, every spring, starting late January/early February and ending early in May.  This spring, I will be teaching three classes, a corporate finance class for MBAs and two identical valuation classes, one to MBAs and one to undergraduates, but with the virus still raging out of control, I will be teaching the classes on Zoom. The class times for the coming semester are below: 

All three classes start on February 1, 2021 and end on May 10, 2021. To sit on the live classes, you have to be a Stern student enrolled in the class, but I plan to record the classes and you can watch those recordings either on my website or on YouTube (where each class will have its own playlist), and access supplementary material (slides, post-class tests). 

2. My (free) online classes: The biggest challenge with following the NYU classes online is that they are not designed as online classes. The lectures are 75-80 minutes long, an eternity for an online experience, where time is measured in seconds, not minutes. I have created 12-15 minute versions of each session, preserving almost 80% of the content in the longer classes, and these online classes are also available on my website or on YouTube. If you do decide to take these classes, there are no hoops to jump through and no cost involved, but there is no credit for classes taken or certification. 

3. NYU certificate classes: If it is important to you that you get more structure, more touch and certification, there is a third option. NYU Stern has certificate versions of the online classes on their website. While the content of the free online and certificate classes are almost identical, you get more polished versions of the recorded sessions, once-every-two-weeks live zoom sessions where you can ask me questions and certificate at the end of the class, if you pass the exams/quizzes and complete the project requirements. The cost, though, is definitely not zero, and if you get sticker shock when you check what NYU charges, please remember that I have no control over or negotiation with you on this price.