Musings on Markets
JANUARY 19, 2022
In a post at the start of 2021 , I argued that while stocks entered the year at elevated levels, especially on historic metrics (such as PE ratios), they were priced to deliver reasonable returns, relative to very low risk free rates (with the treasury bond rate at 0.93% at the start of 2021).
Musings on Markets
MAY 6, 2022
Note that in all three cases, it is not the Fed that is driving rates, but what is happening to inflation. As the inflation bogeyman returns, the worries of what may need to happen to the economy to bring inflation back under control have also mounted.
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Andrew Stolz
MARCH 20, 2020
This is a Valuation Master Class student essay by Teeradon Piyakiattisuk from March 19, 2019. The formula implies the return an investor expects from a risk-free investment plus the return from the stock in relation to market volatility. The market risk premium is calculated from a market rate of return less a risk-free rate.
Musings on Markets
JANUARY 21, 2023
trillion on their market capitalization at the end of 2019. Historical Equity Risk Premium The conventional wisdom, at least as taught in business schools and practiced by appraisers, is that the only practice way to estimate equity risk premiums for the future is to use equity risk premiums earned in the past.
Musings on Markets
NOVEMBER 9, 2021
My two most recent valuations were in June 2019 and January 2020, and I am going to go back to them, not just because they are recent, but because they led to investment decisions on my part. In June 2019, Tesla had hit a rough spot, partly due to concerns about production bottlenecks and debt, and partly due to self inflicted wounds.
ThomsonReuters
MAY 6, 2021
The Codification often provides guidance on how to select a discount rate for a particular area of accounting. The Codification may require the use of a risk-free rate in some places and a risk-adjusted rate in others. The risk premium may incorporate factors such as credit risk or market illiquidity.
Musings on Markets
JANUARY 5, 2024
Thus, I have treated leases as debt in computing debt ratios all through the decades that I have been computing this statistic, even though accounting rules did not do so until 2019, and capitalized R&D, even though accounting has not made that judgment yet. Beta & Risk 1. Equity Risk Premiums 2. Tax rates 4.
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