For the past two decades, Professor Aswath Damodaran (NYU) has dedicated the first two weeks of every new year to what he calls a ritual. “I obtain/collect/download data on all publicly traded companies listed globally, using a variety of data sources, and then analyze and present the data, aggregated at a number of different levels: by country, by region (U.S., Europe, Emerging Markets, Japan, Australia & Canada) and by industry.” He also reports on various measures of operations and leverage, pricing and risk, including equity risk premiums and country risk. Damodaran has just completed his 2013 update, posting it here.
Each year, the professor also tries to add something new to the dataset “to keep it fresh,” he says in a recent blog post. This year, he has added company-specific estimates of costs of equity and capital (in U.S. dollars) in the individual company datasets. In making these estimates, Damodaran cautions that he had to make broad assumptions about country risk. For instance, he used the risk premium of the country in which a company is incorporated, rather than its base of operations. So analysts should take these COC estimates “with a grain of salt,” he says, and if they prefer a more precise estimate for a particular company, they should do a more detailed investigation.
Notably, the professor continues to be generous with his work and modest about his motives, admitting that while wanting to make the data available to all investors, he will also draw on it during the coming year for his own teaching and analysis. Since his own work necessitates completing the yearly update, he sees “little benefit in keeping it behind a pay wall or passwords,” and even though mistakes will happen, he hopes that no personal bias or view has colored the data and nothing he’s done is “opaque.”
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