Musings on Markets

FEBRUARY 10, 2021

I know that many of you are not fans of modern portfolio theory or betas, but ultimately, there is no way around the requirement that you need to measure how risky a business, relative to other businesses. (More on that issue in a future data update post.) US , Europe , Emerging Markets , Japan , Australia/NZ & Canada , Global ) 2.

Risk-free Rate 52

Risk-free Rate Risk Premium Start-ups Equity 52

Musings on Markets

JULY 13, 2022

lived under full democracy, in 2021, with large differences across regions. Country Risk: Equity Risk For equity investors, the price of risk is captured by the equity risk premium, and equity risk premiums will vary across countries.

Risk Premium 81

Risk Premium Risk-free Rate Start-ups Equity 81

Musings on Markets

FEBRUARY 8, 2022

Relative Risk Measures Before we embark on how to measure relative risk, where there can be substantial disagreement, let me start with a statement on which there should be agreement. At the start of 2022, the ten sectors (US) with the highest and lowest relative risk (unlettered betas), are shown below.

Risk Premium 67

Risk Premium Beta Start-ups Equity 67

Musings on Markets

JANUARY 12, 2021

Thus, you and I can disagree about whether beta is a good measure of risk, but not on the principle that no matter what definition of risk you ultimately choose, riskier investments need higher hurdles than safer investments. pm (New York time) All three classes start on February 1, 2021 and end on May 10, 2021.

Corporate Finance 52

Corporate Finance Start-ups Finance Marketability 52

Musings on Markets

JANUARY 5, 2024

Beta & Risk 1. Equity Risk Premiums 2. I also have implied equity risk premiums (forward-looking and dynamic estimate of what investors are pricing stocks to earn in the future) for the S&P 500 going back annually to 1960 and monthly to 2008, and equity risk premiums for countries.

Dividends 98

Dividends Risk Premium Equity Book Value 98

Musings on Markets

JANUARY 6, 2023

When valuing or analyzing a company, I find myself looking for and using macro data (risk premiums, default spreads, tax rates) and industry-level data on profitability, risk and leverage. I do report on a few market-wide data items especially on risk premiums for both equity and debt. Cost of Equity 1.

Risk Premium 52

Risk Premium Dividends EBITDA Start-ups 52

Musings on Markets

JANUARY 31, 2024

In my last three posts, I looked at the macro (equity risk premiums, default spreads, risk free rates) and micro (company risk measures) that feed into the expected returns we demand on investments, and argued that these expected returns become hurdle rates for businesses, in the form of costs of equity and capital.

Equity 79

Equity Book Value Start-ups Corporate Finance 79