Musings on Markets

JANUARY 27, 2022

Interest Rates and Inflation Inflation and interest rates are intertwined, and when their paths deviate, as they sometimes do, there is always a reckoning. Put simply, no central bank, no matter how powerful, can force market interest rates down, if inflation expectations stay low, or up, if investor are anticipating high inflation.

Risk-free Rate 84

Risk-free Rate Treasury Price to Book Start-ups 84

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).

Risk Premium 80

Risk Premium Risk-free Rate Start-ups Equity 80

Musings on Markets

MARCH 25, 2021

The first is that the Fed Funds rate is currently close to zero, limiting the Fed's capacity to signal with lower rates. for the year are at war with its concurrent promise to keep rates low; after all, adding those numbers up yields a intrinsic risk free rate of 8.7%. for 2021 and inflation of 2.2%

Equity 52

Equity Risk-free Rate Treasury Start-ups 52

Musings on Markets

JANUARY 21, 2023

No matter how you slice it, there is no denying that 2022 was the worst year for US equity investors since 2008, and the magnitude of the damage is even more staggering, if you consider it in market value terms. trillion in market capitalization, but for balance, it is also worth noting that US equities are still holding on to a gain of $6.9

Equity 70

Equity Risk Premium Start-ups Dividends 70