Musings on Markets

AUGUST 19, 2024

In fact, the business life cycle has become an integral part of the corporate finance, valuation and investing classes that I teach, and in many of the posts that I have written on this blog. Tech companies age in dog years, and the consequences for how we manage, value and invest in them are profound.

Corporate Finance

CFO News Room

JANUARY 20, 2023

In fact, almost every investment scam in history, from the South Sea Bubble to Bernie Madoff, has offered investors the alluring combination of great opportunities with no or low danger, and induced by sweet talk, but made blind by greed, thousands have fallen prey. Let me use two illustrations to bring this home.

Hurdle Rate

Musings on Markets

FEBRUARY 8, 2022

In fact, almost every investment scam in history, from the South Sea Bubble to Bernie Madoff, has offered investors the alluring combination of great opportunities with no or low danger, and induced by sweet talk, but made blind by greed, thousands have fallen prey. Let me use two illustrations to bring this home.

Hurdle Rate

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?

Investments

CFO News Room

JANUARY 18, 2023

The question of whether a company is making or losing money should be a simple one to answer, especially in an age where accounting statements are governed by a myriad of rules, and a legion of number-crunchers follow these rules to report profits generated by a firm. The numbers yield interesting insights. .

Marketing

Musings on Markets

JANUARY 31, 2024

In my last three posts, I looked at the macro (equity risk premiums, default spreads, risk free rates) and micro (company risk measures) that feed into the expected returns we demand on investments, and argued that these expected returns become hurdle rates for businesses, in the form of costs of equity and capital.

Hurdle Rate

Musings on Markets

FEBRUARY 27, 2022

Measuring Profitability The question of whether a company is making or losing money should be a simple one to answer, especially in an age where accounting statements are governed by a myriad of rules, and a legion of number-crunchers follow these rules to report profits generated by a firm. The numbers yield interesting insights.

Hurdle Rate

CFO News Room

JANUARY 7, 2023

Mean reversion : I am not a knee-jerk believer in mean reversion, but the tendency for numbers to move back towards averages is a strong one. That said, to use mean reversion in analysis or investing, you need to know what these averages are, either over time or across companies, and data can help in that pursuit. .

Marketing

Musings on Markets

JANUARY 5, 2024

In pursuit of an answer to that question, I used company-specific data from Value Line, one of the earliest entrants into the investment data business, to compute an industry average. Aggregate operating numbers 3. Insider, CEO & Institutional holdings 2.

Valuation

Barry Ritholtz

FEBRUARY 21, 2023

We have lowered the cost of investing, and we have improved the quality of those funds. It forced us to make some tough choices in that time in some big investments, whether we were building out our advice capabilities and building virtual teams to do it, or you know, tough choices in our retirement business. BUCKLEY: Yeah.

Leadership

Musings on Markets

JANUARY 12, 2021

Last week, was my data week, where I download and analyze data on all publicly traded companies, listed anywhere in the world, and I will post extensively on what the numbers look like after a most tumultuous year. Face up to uncertainty, rather than avoid or deny it : Uncertainty is a feature of investing/ business, not a bug.

Valuation

Musings on Markets

FEBRUARY 15, 2023

Starting with gross margins, and computing the number for all non-financial service firms, we report the distribution of gross margins across publicly traded companies at the start of 2023, again based upon gross income and sales in the most recent twelve months: While the median gross margin across all publicly traded global firms is about 30%.,

Profit and Loss

Musings on Markets

JANUARY 6, 2023

Mean reversion : I am not a knee-jerk believer in mean reversion, but the tendency for numbers to move back towards averages is a strong one. That said, to use mean reversion in analysis or investing, you need to know what these averages are, either over time or across companies, and data can help in that pursuit.

Valuation

Musings on Markets

JANUARY 27, 2021

In this post, I will take a look at these other markets, starting with a way of dividing investments into assets, commodities, currencies and collectibles that I find useful in thinking about what I can (and cannot) do in those markets, and then reviewing how these markets performed during 2020.

Currencies

Musings on Markets

JANUARY 9, 2021

Put simply, I possess no exclusivity here, and staying consistent with my thesis, I don't expect to expect to make money by investing based upon this data. In closing, I also want to dispense with the notion that data is objective and that numbers-focused people have no bias. So, why bother?

Valuation

Musings on Markets

JANUARY 20, 2021

The Price of Risk The price of risk is what investors demand as a premium, an extra return over and above what they can make on a guaranteed investment (risk free), to invest in a risky asset. Intuitively, if you want to earn a higher risk premium on an investment, holding cash flows fixed, you will pay less for that investment today.

Treasury

Musings on Markets

JANUARY 28, 2024

In this post, I look at risk, a central theme in finance and investing, but one that is surprisingly misunderstood and misconstrued. Risk Measures There is almost no conversation or discussion that you can have about business or investing, where risk is not a part of that discussion. What is risk?

Hurdle Rate

Musings on Markets

MARCH 8, 2023

The dividend principle, which is the focus of this post is built on a very simple principle, which is that if a company is unable to find investments that make returns that meet its hurdle rate thresholds, it should return cash back to the owners in that business.

Hurdle Rate

Barry Ritholtz

MAY 9, 2023

He is the Chief Investment Officer of Asset and Wealth Management at Goldman Sachs. He co-chairs a number of the asset management investment committees. I thought this was an absolutely fascinating way to see the world of investment management. Investment banks were not really a known concept in the area where I grew up.

Investments

Musings on Markets

JULY 25, 2023

To the extent that divide is not just descriptive, but also drives real world investment, both companies and investors may be misallocating their capital, and I will argue for finer delineations of risk.

Currencies

CFO News Room

NOVEMBER 8, 2022

” look at the Monte Carlo simulations, look at what is the hurdle rate. The plan update process for you, it’s not just that the numbers move because a year has gone by and the markets did what they did and you saved what you saved, you withdrew whatever you were going to withdraw. Cean: We actually use J.P.

Restructuring

Musings on Markets

FEBRUARY 27, 2023

Debt's place in business To understand debt's role in a business, I will start with a big picture perspective, where you break a business down into assets-in-place, i.e., the value of investments it has already made and growth assets, the value of investments you expect it to make in the future. Do companies optimize financing mix?

Corporate Finance

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. You can imagine, you give a bearish message at a bullish investment conference, and no one listens to you.

Valuation

Musings on Markets

JULY 24, 2024

Country Risk: Determinants At the risk of stating the obvious, investing and operating in some countries is much riskier than investing and operating in others, with variations in risk on multiple dimensions. Political Structure Would you rather invest/operate in a democracy than in an autocracy?

Hurdle Rate

Barry Ritholtz

MAY 21, 2024

She is one of the few people who combine quantitative investing with behavioral finance. So it’s got this math angle where it, you know, it’s all numbers, but then there’s this behavioral angle and psychological angle where, you know, it’s, it’s kind of a fun problem to tackle. Right, right.

Finance

Barry Ritholtz

DECEMBER 26, 2023

You work at Capital Growth Financial and in former global markets before you join investing Giant Merrill Lynch in 2007, what was that transition like from smaller shops to a really, really big one? And 00:06:38 [Speaker Changed] Door number one was much better than door number three in, in the circumstances. That’s right.

Marketing

Barry Ritholtz

NOVEMBER 25, 2024

I, if you are at all interested in concepts of things like portable alpha or return stacking, or just want to know how a quant looks at the world of investing and tries to decide where there are opportunities. Quantitative investing was, was that the plan from the beginning? 12, 14 even that not a lot of numbers. It was not.

Leverage