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. That is why the risk-free rate becomes an input into option pricing and forward pricing models , and its absence leaves a vacuum.

Investments 98

Investments Currencies Treasury Hurdle Rate 98

Musings on Markets

JANUARY 9, 2021

That said, it does mean that any broad conclusions (about profitability and revenues) that emerge from my data apply to public companies, and it may be dangerous to extrapolate to private businesses, especially in a year like 2020 where private businesses could have been affected more adversely by COVID shutdowns than public companies.

Valuation 52

Valuation Currencies Numbers Corporate Finance 52

Barry Ritholtz

NOVEMBER 25, 2024

So I sell my stocks to make room for gold and it doesn’t, turns out my forecast is wrong. So you’ve got, you’ve got a modeling hurdle rate that you need to figure out when you’re adding diversifiers. I, I kind of feel a little bit of a loss that that’s gone away. The second is behavioral.

Leverage 59

Leverage Investments Marketing Math 59