Musings on Markets

AUGUST 15, 2023

In every introductory finance class, you begin with the notion of a risk-free investment, and the rate on that investment becomes the base on which you build, to get to expected returns on risky assets and investments. What is a risk free investment? For an investment to be risk free then, it has to meet two conditions.

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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. Currencies : A currency serves three functions.

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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. That risk can show up as costs (of buying protection or insurance) or as uninsurable risks that drive up the rates of return investors and businesses need to make, in order to operate.

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Musings on Markets

JANUARY 20, 2021

The failures of the signal have been variously attributed to low interest rates, accounting mis-measurement of earnings (especially at tech companies), and by some, to animal spirits. That metric, though, has been signaling that stocks are over valued for most of the last decade, a ten-year period when stocks delivered blockbuster returns.

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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 true that the Turkish company will face more risk because of its location, but that is an issue separate from currency.

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Barry Ritholtz

NOVEMBER 8, 2022

His latest book could not be more timely, “The Price of Time: The Real Story of Interest,” it’s all about the history of interest rates, money lending, investing speculation, funded by banks and loans and credit. I’ve read the other stuff, Kindleberger got rate [ph] and that sort of stuff. There’s a shortage.

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Barry Ritholtz

DECEMBER 26, 2023

It’s about a 50% fail rate, something like that. I rely on our analysts ratings at the firm. And if you’re, if a stock’s building a big base and say the analysts are 90% sell ratings, and a lot of volume is surged down, you know, when the stock first declined to save $5 from 20, right. Maybe even more.

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