Musings on Markets
AUGUST 5, 2023
If you have been reading my posts, you know that I have an obsession with equity risk premiums, which I believe lie at the center of almost every substantive debate in markets and investing. That said, I don't blame you, if are confused not only about how I estimate this premium, but what it measures.
Musings on Markets
JANUARY 21, 2023
After a year of being pummeled by markets, what are investors pricing stocks to make in 2023 and beyond? The first is that the use of historical risk premiums is predicated on the belief that the future will look like the past, and the world, in all its dimensions, has changed dramatically over the last few decades.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Musings on Markets
FEBRUARY 11, 2023
A few weeks ago, I posted my first data update pulling together what I had learned from looking at the data in 2023, and promised many more on the topic. Default Risk As with individuals and businesses, governments (sovereigns) borrow money and sometimes struggle to pay them back, leading to to the specter of sovereign default.
Musings on Markets
JULY 17, 2023
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. Markets, as is their wont, live to surprise, and the first six months of 2023 has wrong-footed the experts (again).
Musings on Markets
JANUARY 30, 2023
Just as rising equity risk premiums push up the cost of equity, rising default spreads push up the cost of debt of companies, with the added complication of higher default risk for those companies that had pushed to the limits of their borrowing capacity in a low interest-rate environment.
Harvard Corporate Governance
AUGUST 11, 2023
If a large shareholder or a group of investors becomes concerned with the firm’s operations and management, and takes legal steps to assert their claims, it may affect a firm’s outlook, competitive position, its risk premium, and hence discounted value.
Musings on Markets
OCTOBER 4, 2023
As we enter the last quarter of 2023, it has been a roller coaster of a year. In the first half of the year, we had positive surprises on both fronts, as inflation dropped after than expected and the economy stayed resilient, allowing for a comeback on stocks, which I wrote about in a post in July 2023.
Expert insights. Personalized for you.
97 
Let's personalize your content