All about Risk free Rate

English: Chart of the components of United Sta...

I have quarried in the past that risk free rate for doing the valuation of equities and got some interesting answers, wanted to share here.

This is holistic view where an average of 10 year debt YTM of five lowest ratio of govt debt to GDP:

The 10yr Treasury is still a decent risk free rate, but the U.S.’s sovereign debt load will soon match Greece‘s. It may already exceed that level if you count the unfunded liabilities of entitlement programs. Continue reading “All about Risk free Rate”

Why the Efficient Markets Hypothesis is Fatally Flawed, But Why The Idea Underneath It Is Kinda Useful But Not Entirely Watertight.

The “Efficient Markets Hypothesis” is a popular target of anger and derision among lay critics of the econ profession.images
How can financial markets be “efficient” when they just crashed and took our economy down with them? And when sensible people like Bob Shiller, Nouriel Roubini, Bill McBride, et al. were screaming their heads off about a housing bubble years before the pop?

Of course I have some sympathy for these complaints. But the more I learn about and teach finance, the more I learn what an important and useful idea the “EMH” in fact is. I don’t want to say that the EMH is unfairly maligned, but I do think that its vast usefulness is usually ignored in the press.
First of all, people should realize that the EMH is misnamed—it’s not really a hypothesis, it’s not about “efficiency” in the economic sense of the word, Continue reading “Why the Efficient Markets Hypothesis is Fatally Flawed, But Why The Idea Underneath It Is Kinda Useful But Not Entirely Watertight.”

9 Facts about investing


The very famous Aswath Damodaran says,the equity risk premium is the key to investing & valuation .   Ben Graham told once Mr. Market is there to serve you, not to guide you.

And A crucial investing question: Do you know your time frame?

To cut short I am sharing 9 facts on investing below :-
1. Nine out of 10 people in finance don’t have your best interest at heart.

2. Don’t try to predict the future. Continue reading “9 Facts about investing”

Some Learning From Financial Year 2012-2013

imagesJoshua M Brown, did a fantastic collections for the learning’s done in 2012, Here are some of them which I really liked and thought of sharing :-

Herb Greenberg (CNBC): we can ignore the Mayans.

Lauren Young (Reuters): I often like the social media iteration of people more than the in-the-flesh version.

Tom Brakke (Research Puzzle): In investing and politics, detailed analysis and an effective ground game beat belief and bluster. Continue reading “Some Learning From Financial Year 2012-2013”

Top Picks For 2013 – By Barclays

Before I begin the article would like to share this amazing feeling :-  There are very rare occasions when adults and imagesteenagers can get together and have a good time. When it happens, its magical.

Barclays economists forecast a modest acceleration in world growth next year to 3.3 percent from 3.1 percent. They recommend overweight developed market equities relative to fixed income. They base that on valuation. Bonds are too expensive. Equity still looks cheap, especially in Europe.

And how will Europe fair? Even with anemic growth Continue reading “Top Picks For 2013 – By Barclays”