I have never liked using MPT [Modern Portfolio Theory] for calculating the cost of equity capital for two reasons: Beta is not a stable parameter; also, it does not measure risk well. Company-specific risk is significant, and...
Read MoreWhy don’t average investors use discounted cash flow analyses? Typically, they don’t use them for several reasons. Most people don’t want to use an algebraic formula to estimate anything. As some...
Read MoreMy research sometimes takes me into the nooks and crannies of finance. I know it is wonky, but I actually enjoy tearing into complex prospectuses in order get a sense of where value is. One of my current projects is on...
Read MoreSince I met him at a Baltimore CFA Society meeting in 2001, I have appreciated the intelligence of Mike Mauboussin. (My old boss was his roommate in college, so I was told, the name is pronounced...
Read MoreI have a bunch of pieces “ganged up” to go on real estate, international economics, government policies, market risks, and a book review on “Think Twice,” but tonight the topic is pensions, with a side...
Read MoreWhat makes a good ETF in the long term? My, what a question, driven by the ETFs challenging the limits of what is prudent. Maybe it is easier to start with what makes a bad ETF, then: Headline risk can be eclipsed by...
Read MoreBarry did an interesting and short post on the Google Real Estate Index. It measures the amount of search going on over real estate. My question was: okay, are we over or under the trend at present, on a seasonally...
Read MoreAnalyzing currencies is weird, and most people don’t get it. Sometimes, I think I don’t get it. There is nothing fixed in our economic world, no fixed measure of value. Everything trades against...
Read MoreIf I can pull this off, I’ll pay for lunch on this one. I admire two organizations: the Hussman Funds and CrossingWallStreet.com. Both live near me. They have different views on whether the market is overvalued...
Read MoreWhile at our last denominational meeting, I made the offer to the pastors of my denomination that if they needed investment advice, they could contact me for advice. Out of eighty or so pastors that that could have asked...
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