Valuation expert Aswath Damodaran was left surprised, frustrated, and even angry when he discovered an Instagram scam operating under his name. But instead of letting his emotions take over, he chose a different path—he got curious and decided to grade the scam himself.
Damodaran, the renowned Indian-American academic and Professor of Finance at NYU’s Stern School of Business, used the incident as a teachable moment. He not only dissected the scam but also offered practical advice on how investors can protect themselves from stock market fraud — especially as AI-driven scams become more sophisticated.
Imitation may be the best form of flattery, but not if it is used in a scam, Aswath Damodaran said in a social media post on X.
He further said that he has faced imitators before, but most of them have been benign and fall under the “good neighbor” grouping. “I am okay with people using my material to help in their teaching, work or interviews; no acknowledgement needed,” he added.
Damodaran grades Instagram scam
The Instagram scam Aswath Damodaran found himself embroiled in called for people to invest with him. However, Damodaran said that while many would have caught this scam, AI will only get better at scamming.
“AI has clearly upped the ante on scams, and I decided to grade this particular scam, just as I would any of my student submissions,” he said as he assigned A- on language, C- on content as he called the AI post lazy and an F on messaging.
On messaging, the AI post hits almost all wrong notes, from talk of forming an investment group (not my thing) to talk of delivering astounding returns (a fairy tale) to asking for money (again, not me..), Damodaran’s post read.
How to protect yourself from stock market scams?
He also shared advice for investors to protect themselves from AI-related stock scams. His mantra: get past “looks like, sounds like”, do your homework, screen for investment arrogance and avoid ROMO & FOMO.
Damodaran explained that in ROMO (regret over missing out), you look back in time and stocks you wish you had bought or the ones that you sold too soon, making you jealous of those who did and open to conspiracy theories about how the game is fixed. In FOMO (fear of missing out), you worry about missing the next multi-bagger, and in your search for the next big thing, you are easy prey for those who will offer you easy ways (there are none) of finding it, he said.
Every scam is a tango, needing both the scammer and the scammed for the dance to work, with the former preparing the trap, and the latter walking into it, blinded by greed to the false notes, he opined.
Aswath Damodaran gives open access for his work
The NYU professor also explained he leaves his material for open access online on four platforms, calling it an act of “selfishness” and not “altruism”.
You can find all the material Damodaran has shared on his webpage, his blog on Google, his YouTube videos, which are the videos of all his regular classes, and on X.
“All of my shared content shares four features, (a) it is low tech (b) it puts process over products (c) it is driven by pragmatism, not purity (d) it does not offer stock picks or investment advice and (e) it is free,” Damodaran said.
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