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Return on Equity, Earnings Yield and Market Efficiency: Back to Basics!

Musings on Markets

The second was a comment that I made on a LinkedIn post that had built on my implied equity premium approach to the Indian market but had run into a roadblock because of an assumption that, in an efficient market, the return on equity would equate to the cost of equity.

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Market Resilience or Investors In Denial? A Mid-year Assessment for 2023!

Musings on Markets

I am not a market prognosticator for a simple reason. I am just not good at it, and the first six months of 2023 illustrate why market timing is often the impossible dream, something that every investor aspires to be successful at, but very few succeed on a consistent basis.

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A Follow up on Inflation: The Disparate Effects on Company Values!

Musings on Markets

Historical Data: 1930-2019 To see how this framework works in practice, let's start by looking at the performance of US stocks, across the decades, and look at the returns on stocks, broadly categorized based on market capitalization and price to book ratios.

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The Zomato IPO: A Bet on Big Markets and Platforms!

Musings on Markets

Zomato, an Indian online food-delivery company, was opened up to public market investors on July 14, 2021, and its market debut is being watched for clues by a number of other online ventures in India, waiting in the wings to go public.

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Data Update 3: Inflation and its Ripple Effects!

Musings on Markets

By the end of 2021, it was clear that this bout of inflation was not as transient a phenomenon as some had made it out to be, and the big question leading in 2022, for investors and markets, is how inflation will play out during the year, and beyond, and the consequences for stocks, bonds and currencies.

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Data Update 1 for 2023: Setting the table!

Musings on Markets

In my last post, I talked about the ritual that I go through every year ahead of my teaching each spring, and in this one, I will start on the first of a series of posts that I make at the start of each year, where I look at data, both macro and company-level. That is not true!

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Inflation and Investing: False Alarm or Fair Warning?

Musings on Markets

As we approach the mid point of 2021, financial markets, for the most part, have had a good year so far. For those who are older or grew up in countries with high inflation, inflation is far more than a number, wreaking havoc on savings and exposing fault lines in economies and societies.