Musings on Markets

NOVEMBER 9, 2021

My two most recent valuations were in June 2019 and January 2020, and I am going to go back to them, not just because they are recent, but because they led to investment decisions on my part. Between June 2019 and January 2020, the stock went on a tear, as the stock price more than tripled, and I revisited my Tesla valuation.

Start-ups 101

Start-ups Dividends Marketability Market Capitalization 101

Musings on Markets

JANUARY 5, 2024

Employee Count & Compensation I nvesting Principle Financing Principle Dividend Principle Hurdle Rate Project Returns Financing Mix Financing Type Cash Return Dividends/Buyback s 1. Beta & Risk 1. Equity Risk Premiums 2. Ratings & Spreads 2. Tax rates 4. Return on Equity 1. Debt Details 1.

Dividends 105

Dividends Risk Premium Equity Book Value 105

Musings on Markets

JANUARY 26, 2023

Tesla's rise is summarized in the graph below, where we look at the company's revenues and earnings over time, with earnings measured in gross and operating terms, and EBITDA capturing operating cash flows: 2022 numbers updated to reflect 4th quarter earnings call on 1/25/23 Between 2010 and 2020, Tesla grew revenues from $117 million to $31.5

Start-ups 99

Start-ups Marketability Risk Premium Equity 99

Musings on Markets

MAY 24, 2021

As the economy climbs back from the shutdown in 2020, there are some who argue that the monetary and fiscal stimuli of the last year, unprecedented though they may be in size and scale, will not cause inflation because the economy has substantial excess capacity. Louis estimates for inflation rates exceeding 2.5%

Treasury 55

Treasury Start-ups Risk Premium Price to Book 55

Musings on Markets

JANUARY 31, 2024

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 80

Equity Book Value Start-ups Corporate Finance 80

Musings on Markets

JANUARY 12, 2021

I also offer online classes in basic finance (present value, risk models and measures) and accounting (or at least my version of it) as background to my main classes. Discount rates in intrinsic valaution have to change to reflect current market conditions, and can be expected to change over time.

Corporate Finance 52

Corporate Finance Start-ups Finance Marketability 52

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). The year that was.

Risk Premium 99

Risk Premium Risk-free Rate Start-ups Equity 99

Musings on Markets

MARCH 25, 2021

To understand the story and put it in context, I will go back more than a decade to the 2008 crisis, and note how in its aftermath, US treasury rates dropped and stayed low for the next decade. Coming in 2020, the ten-year T.Bond rate at 1.92% was already close to historic lows. for 2021 and inflation of 2.2%

Equity 52

Equity Risk-free Rate Treasury Start-ups 52

Musings on Markets

JANUARY 8, 2022

Those measures took a beating in 2020, as COVID decimated the earnings of companies in many sectors and regions of the world, and while 2021 was a return to some degree of normalcy, there is still damage that has to be worked through. Louis, FRED , which contains historical data on almost every macroeconomic variable, at least for the US.

Risk Premium 99

Risk Premium Start-ups Market Capitalization Corporate Finance 99

Musings on Markets

JANUARY 28, 2025

While it is true that the Fed became more active (in terms of bond buying, in their quantitative easing phase) in the bond market in the last decade, the low treasury rates between 2009 and 2020 were driven primarily by low inflation and anemic real growt h. Data Update 4 for 2025: Interest Rates, Inflation and Central Banks!

Banking 69

Banking Treasury Risk Premium Start-ups 69