Musings on Markets

FEBRUARY 8, 2025

In the first five posts, I have looked at the macro numbers that drive global markets, from interest rates to risk premiums, but it is not my preferred habitat. The second set of inputs are prices of risk, in both the equity and debt markets, with the former measured by equity risk premiums , and the latter by default spreads.

Risk Premium 72

Risk Premium Beta Start-ups Equity 72

Musings on Markets

JANUARY 28, 2025

Entering 2025, the gap between intrinsic and treasury rates has narrowed , as the market consensus settles in on expectations that inflation will stay about the Fed-targeted 2% and that economic activity will be boosted by tax cuts and a business-friendly administration. Data Update 4 for 2025: Interest Rates, Inflation and Central Banks!

Banking 69

Banking Treasury Risk Premium Start-ups 69

Musings on Markets

JANUARY 31, 2025

I graph the performance of the five AI stocks highlighted in the earlier section, throwing in the Meta and Microsoft for good measure, on a daily basis in 2025. YouTube Video Nvidia Valuations Nvidia valuation in September 2024 (Pre DeepSeek) Nvidia valuation in January 2025 (Post DeepSeek)

Start-ups 131

Start-ups Marketability Technology Risk Premium 131

Musings on Markets

FEBRUARY 18, 2025

While I was working on my last two data updates for 2025, I got sidetracked, as I am wont to do, by two events.

Equity 52

Equity Book Value Marketability Start-ups 52

Reynolds Holding

FEBRUARY 23, 2025

The February 18, 2025, Executive Order (Ensuring Accountability For All Agencies) threatens this balance. NYU Business School Professor Damoradans widely used valuation data, for example, currently shows the United States as having among the lowest equity risk premiums in the world. [3]

Systematic Risk 45

Systematic Risk Marketability Equity Risk Premium 45

Reynolds Holding

MARCH 25, 2025

17] See [link] (showing the United States has among the lowest equity risk premiums in the world); Luzi Hail and Christian Leuz, International Differences in the Cost of Equity Capital: Do Legal Institutions and Securities Regulation Matter?, 11, 2025). [20] 12, 2025). [21] 12, 2025). [22] 12, 2025). [22]

Corporate Finance 45

Corporate Finance Finance Banking Marketability 45

Musings on Markets

FEBRUARY 23, 2025

With state and local taxes added on, the US, at the start of 2025, had a marginal corporate tax rate of 25%, almost perfectly in line with a global norm. The default spread is a price of risk in the bond market, and if you recall, I estimated the price of risk in equity markets, with an implied equity risk premium, in my second data update.

Equity 75

Equity EBITDA Risk Premium Gross Debt 75

Musings on Markets

FEBRUARY 6, 2025

The logical step in looking across countries is measuring risk in countries, and bringing that risk into your analysis, by incorporating that risk by demanding higher expected returns in riskier countries. The answers, to you, may seem obvious, but I find it useful to organize the obvious into buckets for analysis.

Risk Premium 67

Risk Premium Start-ups Enterprise Value Equity 67

Global Finance

OCTOBER 29, 2024

We’ve seen dramatic improvements with companies addressing maturities due in 2025, but also a lot of progress on maturities due out to 2026. The risk looks a lot better, and all those reasons support the soft-landing thesis. There are certain sectors that we think are offering better risk/reward.

Start-ups 98

Start-ups Finance Equity Private Equity Firm 98

Musings on Markets

MARCH 15, 2025

Thus, my estimates of equity risk premiums, updated every month, are not designed to make big statements about markets but more to get inputs I need to value companies. In the table below, I show my estimates of the implied equity risk premium for the S&P 500 at the start of every month, since January 2024, and on March 14, 2025.

Start-ups 128

Start-ups Risk Premium Marketability Equity 128