Remove 2024 Remove Dividends Remove Risk Premium
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Data Update 1 for 2025: The Draw (and Danger) of Data

Musings on Markets

Thus, as you peruse my historical data on implied equity risk premiums or PE ratios for the S&P 500 over time, you may be tempted to compute averages and use them in your investment strategies, or use my industry averages for debt ratios and pricing multiples as the target for every company in the peer group, but you should hold back.

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Data Update 2 for 2024: A Stock Comeback - Winning the Expectations Game!

Musings on Markets

As we move into 2024, it looks like expectations have been reset, with most forecasters now expecting the economy to glide in for a soft landing and interest rates to decline, and while that may seem like good news, it will represent a challenge for equity market investors.

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Data Update 1 for 2024: The data speaks, but what does it say?

Musings on Markets

I have also developed a practice in the last decade of spending much of January exploring what the data tells us, and does not tell us, about the investing, financing and dividend choices that companies made during the most recent year. Beta & Risk 1. Dividends and Potential Dividends (FCFE) 1. Equity Risk Premiums 2.

Dividends 106
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Data Update 2 for 2023: A Rocky Year for Equities!

Musings on Markets

The first is the dividends you receive, while you hold stocks, a cash flow stream that provides a measure of stability to investors who seek it. It too requires estimate for inputs, but the range of error is magnitudes smaller than with historical premiums. Actual Returns Your returns on equities come in one of two forms.

Equity 95
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Anatomy of a Market Crisis: Tariffs, Markets and the Economy!

Musings on Markets

There was undoubtedly some panic selling on Friday, but the flight to safety, whether it be in moving into treasuries or high dividend paying stocks, was muted. In the language of risk, they are demanding higher prices for risk, translating into higher risk premiums.

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Data Update 6 for 2025: From Macro to Micro - The Hurdle Rate Question!

Musings on Markets

In the first five posts, I have looked at the macro numbers that drive global markets, from interest rates to risk premiums, but it is not my preferred habitat. The second set of inputs are prices of risk, in both the equity and debt markets, with the former measured by equity risk premiums , and the latter by default spreads.

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Data Update 5 for 2024: Profitability - The End Game for Business?

Musings on Markets

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.

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