Musings on Markets

FEBRUARY 18, 2025

With these characteristics, the accounting balance sheets for these companies will be identical right after they start up, and the book value of equity will be $60 million in each company. The first is that if markets are efficient, the price to book ratios will reflect the quality of these companies.

Equity 52

Equity Book Value Marketability Start-ups 52

Musings on Markets

JULY 17, 2023

Exacerbating the pain, corporate default spreads rose during the course of 2022: While default spreads rose across ratings classes, the rise was much more pronounced for the lowest ratings classes, part of a bigger story about risk capital that spilled across markets and asset classes.

Marketability 98

Marketability Risk Premium Start-ups Treasury 98

Musings on Markets

JANUARY 6, 2023

For example, I have seen it asserted that a stock that trades at less than book value is cheap or that a stock that trades at more than twenty times EBITDA is expensive. I do report on a few market-wide data items especially on risk premiums for both equity and debt. Standard deviation in stock price 2.

Risk Premium 52

Risk Premium Dividends Start-ups EBITDA 52

Musings on Markets

JANUARY 9, 2021

Consider, for instance, an investor who picks stocks based upon price to book ratios, who finds a stock trading at a price to book ratio of 1.5. buy stocks that trade at less than book value or trade at PEG ratios less than one) for individual stocks.

Risk Premium 52

Risk Premium Market Capitalization Equity Start-ups 52

Musings on Markets

JULY 22, 2021

The second is the cost of capital, a number that most valuation classes and books (including mine) belabor to the point of diminishing returns. Finally, dismissing Zomato as an investment, just because it does not make money now, or fails to meet some conventional value tests on pricing (PE, Price to Book), is investing malpractice.

Marketability 99

Marketability Start-ups Equity Price to Book 99