Musings on Markets

JANUARY 20, 2021

Risk free rates over time : While it is generally not a good idea to play interest rate forecaster, we are in unusual times, with rates close to all time lows. Ultimately though, the judgment you make on the market will be a joint effect of your views on the economy and interest rates in the next few years.

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Treasury Investments Valuation Hurdle Rate 52

Musings on Markets

JANUARY 27, 2021

In my last post , I described the wild ride that the price of risk took in 2020, with equity risk premiums and default spreads initially sky rocketing, as the virus led to global economic shutdowns, and then just as abruptly dropping back to pre-crisis levels over the course of the year. Data Update 4 for 2021: The Hurdle Rate Question.

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Currencies Investments Marketing Treasury 52

Musings on Markets

JANUARY 12, 2021

During 2020, as I watched companies and investors struggle with the after shocks of the economic shut down created by COVID, I wrote a series of fourteen posts (linked below) on what I was learning, unlearning and relearning about corporate finance and valuation.

Valuation 52

Valuation Corporate Finance Finance Investments 52

Barry Ritholtz

NOVEMBER 8, 2022

CHANCELLOR: And I actually — one of my last projects at GMO was to do a sort of — to look at what was going on from economic sentiment perspective, looking at various different measures in a bull bear ratio, amount of margin loans in system. Essentially, that’s what interest rates allow. back in sort of 2012.

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CFO News Room

NOVEMBER 8, 2022

Because the economics of profitability start showing up particularly when you’re starting to hire other advisors and staff and team. ” look at the Monte Carlo simulations, look at what is the hurdle rate. You really have to start crystalizing an org chart and who does what, and clarifying roles and responsibilities.

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Musings on Markets

MARCH 8, 2023

In the second, Warren Buffet used some heated language to describe those who opposed buybacks, calling them “economic illiterates” and “silver tongued demagogues “. Going back in time to last year’s inflation reduction act, buybacks were explicitly targeted for taxes, with the perspective that they were damaging US companies.

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Hurdle Rate Corporate Finance Investments Finance 94

Musings on Markets

AUGUST 15, 2023

As the risk-free rate rises, expected returns on equities will be pushed up, and holding all else constant, stock prices will go down., and the reverse will occur, when risk-free rates drop. Ultimately, a government that chooses to default is making a political choice, as much as it is an economic one.

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Investments Currencies Treasury Hurdle Rate 83

CFO News Room

JANUARY 7, 2023

Much of my focus, when it comes to data, is on company-specific variables, rather than macro economic data, for two reasons. Federal Reserve Economic Data (FRED) : This is hands down, in my view, the best site for macroeconomic data in the world.

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Marketing Valuation Corporate Finance Financial Analysis 130

Musings on Markets

JANUARY 6, 2023

Data Items Much of my focus, when it comes to data, is on company-specific variables, rather than macro economic data, for two reasons. Federal Reserve Economic Data (FRED) : This is hands down, in my view, the best site for macroeconomic data in the world.

Valuation 52

Valuation Corporate Finance Financial Analysis Leverage 52

Musings on Markets

FEBRUARY 27, 2023

Furthermore, do they optimize they debt ratios to deliver the lowest hurdle rates. In the late 1990s, it was an economic recession that was the precipitating factor, but the last three increases in delinquencies have had their origins in other forces. Do companies optimize financing mix?

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Corporate Finance Finance Marketing Leverage 52

Musings on Markets

JANUARY 9, 2021

The second is that there are great (and free) sources for macro economic data, ranging from the Federal Reserve (FRED) to the World Bank and I don’t see the point of replicating something that they already do well. Data Update 4 for 2021: The Hurdle Rate Question. Data Update 2 for 2021: The Price of Risk!

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Valuation Currencies Numbers Corporate Finance 52

Musings on Markets

JANUARY 28, 2024

In particular, there are wide variations in how risk is measured, and once measured, across companies and countries, and those variations can lead to differences in expected returns and hurdle rates, central to both corporate finance and investing judgments. What's coming?

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Hurdle Rate Concentration Investments Finance 95

Musings on Markets

JULY 25, 2023

One is curiosity , as political and economic crises roll through regions of the world, roiling long-held beliefs about safe and risky countries. My suggestion is that for countries where recent political or economic events would lead you to believe that sovereign rating is dated, you should switch to using sovereign CDS spreads.

Currencies 52

Currencies Hurdle Rate Valuation Marketing 52

Barry Ritholtz

MAY 21, 2024

But now we’re back to a more normal hurdle rate. 5% interest rates is not super high. I know you like to discuss there are different phases of the, of the, both the market and the economic cycle. I mean, we had a global pandemic, a complete shutdown of global economic activity. 00:50:03 Not anymore.

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Finance Marketing Numbers Investments 59

Barry Ritholtz

DECEMBER 26, 2023

And economic indicators, like the unemployment rate or the claims data, and you know, we actually did some scenario analysis around that recently, just talking about, Hey, what happens if the employment rate rises versus falls? I mean, I, I haven’t done that much work. I think, I think it’s probably more useful.

Marketing 64

Marketing Leadership Finance Investments 64

Barry Ritholtz

NOVEMBER 25, 2024

There’s very few, I would argue probably no consistent predictors of, of any sort of economic or market cyclicality. So you’ve got, you’ve got a modeling hurdle rate that you need to figure out when you’re adding diversifiers. I think ity economics would argue you have to protect your capital to survive.

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Leverage Investments Math Marketing 59

Musings on Markets

JULY 24, 2024

In the section below, I highlight the differences on four major dimensions - political structure, exposure to war/violence, extent of corruption and protections for legal and property rights, with the focus firmly on the economic risks rather than on social consequences. That is easier said than done, for two reasons.

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Hurdle Rate Currencies Valuation Economics 74