Finance tends to split people into two camps: number crunchers who trust only models, and storytellers who trust only narrative. In this Talks at Google lecture based on his book Narrative and Numbers, Prof Aswath Damodaran argues that a good valuation needs both.
He shows how to build a story about a business, test whether it is possible, plausible and probable, and then turn each part of the story into a valuation input such as market size, margins and reinvestment. He illustrates the process with valuations of Uber and Ferrari.
This talk is especially useful for founders preparing to raise funds, investors evaluating high-growth companies, and anyone who wants to understand why two analysts can reach very different values for the same company.