Valuation. The illusion of precision

I find it difficult to see how valuation could indeed evolve if it continues to revolve around the CAPM with its normal distributions, its quadratic utility, its homogeneous investor expectations and frictionless markets. The notorious surveys of Pablo Fernández (IESE) – “The equity premium in 150 textbooks” or “Betas used by professors: A survey with 2,500 answers” – expose the emperor as having no clothes and empowers skeptic clients to make a mockery of us all. → Read More

Prometheus unbound. A comment on the absolute-return myth

The Best Perspectives award to “The Myth of the Absolute-Return Investor” gave pause for thought. Although I applaud every denouncement of untrue marketing speak, I believe the authors’ attack is somewhat misguided. I have four misgivings and a nod of approval. → Read More