Musings on Markets

JANUARY 5, 2024

That year, I computed these industry-level statistics for five variables that I found myself using repeatedly in my valuations, and once I had them, I could not think of a good reason to keep them secret. Valuation Pricing Growth & Reinvestment Profitability Risk Multiple s 1. Insider, CEO & Institutional holdings 2.

Valuation 100

Valuation Financial Analysis Analyzing Data Profit and Loss 100

CFO News Room

JANUARY 7, 2023

Data: Trickle to a Flood! It is perhaps a reflection of my age that I remember when getting data to do corporate financial analysis or valuation was a chore. By the same token, it is impossible to use a pricing metric (PE or EV to EBITDA), without a sense of the cross sectional distribution of that metric at the time.

Marketing 130

Marketing Valuation Corporate Finance Financial Analysis 130

Barry Ritholtz

NOVEMBER 8, 2022

CHANCELLOR: And look — yeah, but then if you look at the valuation of the market at that time, the market was — the U.S. CHANCELLOR: And look — yeah, but then if you look at the valuation of the market at that time, the market was — the U.S. All these factors have an interest rate embedded in them.

Valuation 59

Valuation Finance Investments Banking 59

Musings on Markets

JANUARY 20, 2021

In the picture below, I make my best judgments on each of these dimensions, using consensus estimates of earnings in 2021 and 2022 to get started, but then slowing growth in earnings to match the growth rate in the economy, which I approximate with the risk free rate. Data Update 4 for 2021: The Hurdle Rate Question.

Treasury 52

Treasury Investments Valuation Hurdle Rate 52

Musings on Markets

JANUARY 6, 2023

It is perhaps a reflection of my age that I remember when getting data to do corporate financial analysis or valuation was a chore. Thus, without a sense of what comprises a high or low profit margin for a firm, or what the cost of capital is for the typical company, it is easy to create "fairy tale" valuations and analyses.

Valuation 52

Valuation Corporate Finance Financial Analysis Leverage 52

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. and the reverse will occur, when risk-free rates drop.

Investments 83

Investments Currencies Treasury Hurdle Rate 83

Barry Ritholtz

MAY 9, 2023

One, when people have asked me to compare and contrast today versus 2007, 2008, what you hear from a lot of people is, yes, there’s some fairly heady valuations. But I don’t think this is a wholesale shift, we’re in a higher rate environment, obviously, for now. We’ve seen a couple of these events now.

Investments 119

Investments Banking Advertising Marketing 119

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. Data Update 4 for 2021: The Hurdle Rate Question. Data Update 2 for 2021: The Price of Risk!

Valuation 52

Valuation Currencies Numbers Corporate Finance 52

CFO News Room

NOVEMBER 8, 2022

” look at the Monte Carlo simulations, look at what is the hurdle rate. So, last year, valuations were high, interest rates were low. And I said, “Look, you’ve got to look at where we are with valuations, and you have to look at where the 10-year Treasury is at. Is it at 1.5%?

Restructuring 130

Restructuring Planning Marketing Accounting 130

Barry Ritholtz

NOVEMBER 25, 2024

00:21:21 [Speaker Changed] So this story came out that, oh, value is defensive because it has this valuation buffer to it 00:21:28 [Speaker Changed] In that one example. So you’ve got, you’ve got a modeling hurdle rate that you need to figure out when you’re adding diversifiers. The second is behavioral.

Leverage 52

Leverage Investments Marketing Math 52

Musings on Markets

JULY 25, 2023

Company Hurdle Rates This post has already become much longer than I intended it to be, but I want to end by bringing these equity risk premiums down to the company level, and examining how they play out in hurdle rates, to be used in investment analysis by companies and valuation by investors.

Currencies 52

Currencies Hurdle Rate Valuation Marketing 52

Barry Ritholtz

MAY 21, 2024

And one of the worst performing factors has been valuation. So we’re now in an environment where all the 45-year-old portfolio managers out there have been, have worked their entire careers in these momentum fueled markets, and they’ve been trained to believe that valuation doesn’t matter. 00:50:03 Not anymore.

Finance 59

Finance Marketing Numbers Investments 59

Musings on Markets

JULY 24, 2024

Country Risk in Business Most corporate finance classes and textbooks leave students with the proposition that the right hurdle rate to use in assessing business investments is the cost of capital, but create a host of confusion about what exactly that cost of capital measures.

Hurdle Rate 74

Hurdle Rate Currencies Valuation Economics 74