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Data Update 6 for 2025: From Macro to Micro - The Hurdle Rate Question!

Musings on Markets

A key tool in both endeavors is a hurdle rate a rate of return that you determine as your required return for business and investment decisions. It deepens the acquaintance because you encounter hurdle rates in almost every aspect of finance, and it ruins it, by making these hurdle rates all about equations and models.

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In Search of Safe Havens: The Trust Deficit and Risk-free Investments!

Musings on Markets

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.

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Transcript: Tim Buckley, Vanguard’s CEO

Barry Ritholtz

That means a low hurdle rate. So we’re probably a lot more patient, but at the same time, you know, highly educated in the questions we ask. If you think about the fact that we’re client-owned, so we’re delivering as close to at costs as possible. So we do that. Like, we’re going to move on from them.

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Transcript: Savita Subramanian

Barry Ritholtz

And so I went to business school, I decided to go to business school, get that formal education. But now we’re back to a more normal hurdle rate. 5% interest rates is not super high. So after, after working at Scutter, I realized I didn’t really have the foundations for financials. 00:50:03 Not anymore.

Finance 59
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Transcript: Corey Hoffstein on Return Stacking  

Barry Ritholtz

Let me see if I can go to grad school, continue this education. So you’ve got, you’ve got a modeling hurdle rate that you need to figure out when you’re adding diversifiers. Let me, let me educate you as to why you’re wrong. And that’s how I ended up at Carnegie Mellon.