Remove Risk Premium Remove Risk-free Rate Remove Technology
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Data Update 4 for 2022: Risk = Danger + Opportunity!

Musings on Markets

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. Technology and cyclical companies dominate raw highest risk rankings.

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Market Bipolarity: Exuberance versus Exhaustion!

Musings on Markets

Price of Risk The drop in stock and bond prices in the third quarter of 2023 can partly be attributed to rising interest rates, but how much of that drop is due to the price of risk changing? below the index value of 4288, confirming my base case conclusion.

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Use of Discounted Cash Flow Approaches in US GAAP Accounting

ThomsonReuters

The Codification often provides guidance on how to select a discount rate for a particular area of accounting. The Codification may require the use of a risk-free rate in some places and a risk-adjusted rate in others. The risk premium may incorporate factors such as credit risk or market illiquidity.

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9 Startup Valuation Methods: 5 to Use, 4 to Avoid

Equidam

Critiquing Unsuitable Methods for High-Growth Startups Several traditional or overly simplistic methods fail to adequately capture the unique characteristics of technology startups. butcher, barber) where assets are tangible and customer acquisition straightforward, it breaks down for technology startups.

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Tesla's Trillion Dollar Moment: A Valuation Revisit!

Musings on Markets

I would be lying if I said that I have had clarity about Tesla's story over the last decade, because it has so many tangents, distractions and shifts along the way, flirting with narratives about being a battery company, an energy company and a technology company. for mature markets.

Start-ups 101
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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.

Equity 82
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Tesla in 2023: A Return to Reality, The Start of the End or Time to Buy?

Musings on Markets

Having watched Tesla reinvest and grow over the last few years, it is clear to me that the company's been able to generate its growth with far less money invested in plant and more in technology and R&D than a typical auto company. The Market : The US equity market in January 2023 looks very different from the market at the start of 2022.