Good article, and the reasoning is laid out in a compelling way. Too bad Damodaran appears to be making no reference to the fact that DCF is the most popular with academics, valuation professionals and those who want to justify paying an inflated multiple (with their own money or, more commonly, someone else's).

He correctly notes that it is a garbage in - garbage out process, and concludes that we should not feed models with garbage, or pretend that they have more predictive power than they really do. Fair enough. But he also expresses belief that a DCF model is a part of "the most straightforward" valuation process, which I find controversial. The most straightforward valuation is either based on (adjusted) multiples or, for less mature businesses, a venture capital method (multiples-based terminal valuation discounted using a rule of thumb-based IRR). The consequences are profound as investors seem to rely on multiples a lot more than the academic world.