U.S stocks closed lower on Wednesday, as they failed to build on a two-day winning streak. The dip marks yet another episode in what has been a topsy turvy year for stock markets. Aswath Damodaran, a professor of finance at New York University's Stern School of Business, believes the volatility boils down to two key reasons — what's happening in the macro environment and the prevailing "mood and momentum" in the market. "My advice to investors is to recognize that the day-to-day movements that you see in this market have little to do with fundamentals, and a great deal to do with mood and momentum because people are off balance, too," Damodaran, sometimes referred to as the "Dean of Valuation," told CNBC's "Street Signs Asia" on Wednesday. "Much has happened this year for people to try to make sense of what's coming and until they get some consensus on where we are going, we are going to get this volatility, these up and down days," he added. Damodaran believes this is just a temporary phenomenon, with fundamentals set to eventually return as the main driving force for stocks. "You have got to be ready for when it comes back," he said. Stocks 'at a bargain' How then, should investors trade in the present, given the unpredictability of the stock market? "Your big concern if you're an investor is to buy companies that can withstand a hurricane, a catastrophe if it does happen, because the odds of it happening might be no," Damodaran said. "But we could be in for a really severe recession and risk capital not returning to the game for a year or two years, maybe even three years." Damodaran said he is steering away from companies with high operating and financial leverage, and toward companies with solid earnings and cash flows — even if they are unable to deliver growth at this juncture. Read more Market is heading toward the ‘best week of the year,’ pro says — and names 2 stocks to play it Should investors flee stocks? Strategists give their take — and reveal how to trade the volatility Investment pro says ETFs are now a better bet than stocks — and reveals areas of 'tremendous' value Within the big tech space, Damodaran said he owns shares in Meta , Amazon , Alphabet , Apple , and Microsoft . He also owns "winners that have fallen on hard times," such as Nvidia . With their stock prices down significantly this year, he said investors will be getting these stocks "at a bargain." "These companies — they're not going anywhere. These are not levered companies; they don't have a lot of debt. They're going to survive. They're going to make money. They're going to sell their products. So, from that perspective, I feel more comfortable with these stocks than with the traditional safe companies," he said. For instance, Damodaran said he would rather put money in Apple than Coca-Cola, given the former's greater "staying power." "I might be an outlier in this. But I think big tech has a lot more staying power in terms of revenues and earnings than people give it credit," he said.