Musings on Markets

JANUARY 5, 2024

Beta & Risk 1. Return on (invested) capital 2. In short, to compute the PE ratio for software companies, I add up the market capitalization of all software companies, including money-losers, and divide by the aggregated earnings across these companies, against including losses. Return on Equity 1. Debt Details 1.

Dividends 105

Dividends Risk Premium Equity Book Value 105

Musings on Markets

NOVEMBER 1, 2023

It was after one of these downturns in 2019, when the stock hit $180 (with a market cap of $32 billion), that I bought Tesla for the first time , albeit labeling it as my corporate teenager, an investment that would frustrate me because it would get in the way of its own potential.

Start-ups 124

Start-ups Marketability Market Capitalization Equity 124

Musings on Markets

FEBRUARY 27, 2023

In fact, at a zero percent tax rate, the optimal debt ratio, if you define it as the mix that minimizes cost of capital is zero. The market debt ratio, in contrast, uses the market's estimate of the value of equity, i.e., its market capitalization, as the value of equity.

Equity 52

Equity EBITDA Start-ups Net Debt 52

Musings on Markets

JANUARY 10, 2025

Not surprisingly, the company listings are across the world, and I look at the breakdown of companies, by number and market cap, by geography: As you can see, the market cap of US companies at the start of 2025 accounted for roughly 49% of the market cap of global stocks, up from 44% at the start of 2024 and 42% at the start of 2023.

Risk Premium 119

Risk Premium Dividends Start-ups Corporate Finance 119

Musings on Markets

FEBRUARY 8, 2025

While much of the discussion of this measure gets mired in the capital asset pricing model, and the supposed adequacies and inadequacies of beta, I think that too much is made of it, and that the model is adaptable enough to allow for other measures of relative risk. Corporate Default Risk , i.e,

Risk Premium 72

Risk Premium Beta Start-ups Equity 72