Musings on Markets

FEBRUARY 8, 2025

I spend most of my time in the far less rarefied air of corporate finance and valuation, where businesses try to decide what projects to invest in, and investors attempt to estimate business value.

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E78 Partners

MARCH 3, 2025

Strong public market valuations in key sectorsespecially technology and healthcareare attracting growth-driven businesses. Implement budgeting and forecasting processes that withstand market scrutiny. Refine Financial Planning and Analysis (FP&A): Develop robust forecasting models and scenario planning tools.

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CFO News Room

JANUARY 9, 2023

There is a market-based estimate of inflation that comes from the US treasury market, where a comparison of yields on a treasury bond with that on a inflation-protected treasury bond of equivalent maturity provides a measure of expected inflation.

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Nerd's Eye View

APRIL 3, 2024

Notably, the work-from-home movement has resulted in a dramatic drop in office valuations that could lead to a whole host of issues, including lending constraints in the banking sector, which is already sitting on a mountain of unrealized losses on Treasuries and mortgages.

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Musings on Markets

OCTOBER 4, 2023

While the rise in treasury rates has been less dramatic this year, rates have continued to rise across the term structure: US Treasury While short term rates rose sharply in the first half of the year, and long term rates stabilized, the third quarter has sen a reversal, with short term rates now stabilizing and long term rates rising.

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Musings on Markets

JANUARY 17, 2024

As we move into 2024, it looks like expectations have been reset, with most forecasters now expecting the economy to glide in for a soft landing and interest rates to decline, and while that may seem like good news, it will represent a challenge for equity market investors.

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CFO News Room

JANUARY 14, 2023

Inflation: The Full Story. I wrote my first post on this blog in 2008, and inflation merited barely a mention until 2020, though it is an integral component of investing and valuation.

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Musings on Markets

SEPTEMBER 27, 2022

There is a market-based estimate of inflation that comes from the US treasury market, where a comparison of yields on a treasury bond with that on a inflation-protected treasury bond of equivalent maturity provides a measure of expected inflation.

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CFO News Room

JANUARY 22, 2023

Thus, if you assume that analysts are over estimating earnings and/or that companies will return less of these earnings to investors in the form of dividends and buybacks, the estimated equity risk premium will decrease, and if you assume that growth will be stronger than forecast, the equity risk premium will rise.

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Musings on Markets

JULY 17, 2023

In my third post at the start of 2023, I looked at US treasuries, the long-touted haven of safety for investors. In 2022, they were in the eye on the storm, with the ten-year US treasury bond depreciating in price by more than 19% during the year, the worst year for US treasury returns in a century.

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Musings on Markets

AUGUST 5, 2023

Put simply, if you are using an equity risk premium in your company valuation that is much lower (higher) than the market-set equity risk premium, you are biasing yourself to find the company to be under (over) valued.

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Musings on Markets

MAY 6, 2022

Inflation: The Full Story I wrote my first post on this blog in 2008, and inflation merited barely a mention until 2020, though it is an integral component of investing and valuation. As treasury rates have risen, markets also seem to have been more wary about risk, and how it is being priced.

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PYMNTS

JANUARY 7, 2020

Artificial intelligence (AI)-powered FinTech Software as a Service (SaaS) firm HighRadius raised $125 million in a Series B growth funding round, giving it a unicorn valuation, the company announced on Tuesday (Jan. The platform’s AI-powered cash forecasting helps to prevent poor financing decisions. “We

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PYMNTS

JANUARY 7, 2020

Artificial intelligence (AI)-powered FinTech Software as a Service (SaaS) firm HighRadius raised $125 million in a Series B growth funding round, giving it a unicorn valuation, the company announced on Tuesday (Jan. The platform’s AI-powered cash forecasting helps to prevent poor financing decisions. “We

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Musings on Markets

JANUARY 21, 2023

The graph and table below provide my estimates of the historical equity risk premiums in the US market: As you can see, I arrive at premiums ranging from 4.12% to 13.08%, depending upon my estimation choices on time period, treasury rate used and averaging approach, but I don't use any of these numbers as my estimate for the future for two reasons.

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Musings on Markets

AUGUST 15, 2023

After the rating downgrade, my mailbox was inundated with questions of what this action meant for investing, in general, and for corporate finance and valuation practice, in particular, and this post is my attempt to answer them all with one post. For an investment to be risk free then, it has to meet two conditions.

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PYMNTS

MAY 5, 2020

Analysts at UBS Securities lowered Wells Fargo’s rating and earnings forecast, saying the bank will have a tougher time bouncing back from the pandemic — more so than other financial institutions. The Small Business Administration (SBA) and the Treasury Department said there is roughly $145 billion left in the fund. Banks in the U.S.

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Musings on Markets

JANUARY 24, 2024

As we start 2024, the interest rate prognosticators who misread the bond markets so badly in 2023 are back to making their 2024 forecasts, and they show no evidence of having learned any lessons from the last year. The Fed Effect: Where's the beef? The Fed Effect: Where's the beef? 4.50%, by the end of the year.

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E78 Partners

APRIL 13, 2023

Preqin , the leading trusted industry data provider, forecasts that global private capital assets under management (AUM) will reach a staggering $18.3 This trend was made possible by the staggering amounts of capital available in private markets during an era of lower interest rates and surging valuations.

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Barry Ritholtz

AUGUST 16, 2022

RITHOLTZ: And those were Treasuries. Well, I’m not forecasting another 20% down, but I do think we could go down 5% or 10%. I can’t imagine the present occupant of the White House is happy with that sort of inflation forecast. And last market question, so we’ve seen equity valuations come down.

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Musings on Markets

JANUARY 20, 2021

Put simply they look at a long time period in the past (50 years or even 100 years) and look at the premium that stocks earned over a risk free investment (treasury bills or bonds); that historical risk premium then gets used as a measure of the current equity risk premium.

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PYMNTS

NOVEMBER 10, 2017

Hong Kong’s WeLab still won’t reveal its valuation after securing another major funding round. A healthy $12 million raised by Germany’s Treasury Intelligence Solutions (TIS) will boost the B2B payments company thanks to support from 83North, Target Partners and Zobito, reports said this week. Alternative Lending.

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Musings on Markets

JANUARY 9, 2021

To illustrate, consider a practice in valuation, where analysts are trained to add a small cap premium to discount rates for smaller companies, on the intuition that they are riskier than larger companies. It is very likely that these rules of thumb were developed from data and observation, but at a different point in time.

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Future CFO

DECEMBER 7, 2020

ST: I’m reporting to the CEO and board of directors, providing leadership in all aspects of business and finance, including strategic planning, annual business plan, rolling forecast, financial management, treasury, regulatory reporting, internal controls, taxation, and procurement. All these are key to success.

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CFO News Room

JANUARY 23, 2023

In a post at the start of 2021 , I argued that while stocks entered the year at elevated levels, especially on historic metrics (such as PE ratios), they were priced to deliver reasonable returns, relative to very low risk free rates (with the treasury bond rate at 0.93% at the start of 2021).

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Musings on Markets

JANUARY 19, 2022

In a post at the start of 2021 , I argued that while stocks entered the year at elevated levels, especially on historic metrics (such as PE ratios), they were priced to deliver reasonable returns, relative to very low risk free rates (with the treasury bond rate at 0.93% at the start of 2021). The year that was.

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CFO News Room

JANUARY 17, 2023

In the graph below, I start with two traditional havens for US investors, the US dollar and treasury bonds: Trade-weighted dollar & US 10-year T.Bond Rate. As a result of the events of the last three weeks, forecasters have increased the probabilities of recessions from 15% to 20% for the US and from 17.5% to 25% for the Eurozone.

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Musings on Markets

MARCH 19, 2022

In the graph below, I list out two measures of expected inflation, one from a inflation expectations ETF ( ProShares Inflation Expectation ETF ) and the other from the Federal Reserve 5-year forward inflation measure , computed as the difference between treasury and TIPs rates. to 25% for the Eurozone. as of March 16, 2022.

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Simply Treasury

FEBRUARY 24, 2020

Think of the automakers and Tesla's recent valuation that reflects these profound changes. Central banks want to incorporate climate risks into all their forecasts. François Masquelier, Simply TREASURY - February 2020 But (2) the second type of risk is the risk of transition. It may be an opportunity, but at what cost?

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CFO News Room

JANUARY 12, 2023

The first is the return that can be earned on guaranteed investments , i.e., US treasury bills and bonds, for instance, if you are a investor in US dollar, since it is a measure of what someone who takes no or very low risk can expect to earn. There are two macro factors that will come into play, and both are in play in markets today.

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Barry Ritholtz

AUGUST 29, 2023

DAVIS: Where international equities, because of valuations, probably 7% to 7.5%. RITHOLTZ: So let’s talk about that, because that gap in valuation has persisted for a long time. How durable is that shift, given how large that gap has gotten in valuation between US stocks and the rest of the developed world?

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Musings on Markets

JULY 1, 2022

The first is the return that can be earned on guaranteed investments , i.e., US treasury bills and bonds, for instance, if you are a investor in US dollar, since it is a measure of what someone who takes no or very low risk can expect to earn. There are two macro factors that will come into play, and both are in play in markets today.

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Future CFO

APRIL 13, 2023

The three years since 2020 saw organisations focus on digitalisation, payment efficiency, security, and cash forecasting. PwC says M&A tends to slow during times of uncertainty or market volatility—but those can be precisely the times when valuations become more attractive and opportunity knocks. In times of crisis, cash is king.

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Barry Ritholtz

SEPTEMBER 26, 2023

First time in decades, treasuries and investment grade corporates, it’s, it’s an attractive yield at five 5.5%. Yeah, 00:25:49 [Speaker Changed] It’s, it’s from an absolute return standpoint, treasuries IG corporates are high yield bonds are more attractive than they’ve been in very long time.

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Musings on Markets

MAY 11, 2021

Historical Stock Returns: Pre and Post-tax At the start of every year, I update a dataset , where I look at historical returns on stocks over time, and compare these returns to returns on treasury bonds/bills, corporate bonds and gold.

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Barry Ritholtz

FEBRUARY 13, 2023

But since you mentioned getting return on the risk you take, how do you think about duration when the three-month Treasury is more or less the same or better than the 10-year? Now, we’re shifting to more international places like China, Europe, et cetera, that are really growing, and that valuations are cheaper. RIEDER: Yeah.

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Barry Ritholtz

OCTOBER 31, 2023

Wall Street Journal ) • Great news about American wealth: Regular Americans are getting richer : A week ago, the Fed and Treasury released its 2022 data from the Survey of Consumer Finances (SCF), which is a big survey they do every three years in which they ask households about their finances. It Isn’t Just Rising Interest Rates.

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