Recent content by johnny88

Well, I received an A- for my paper. I implemented some of the ideas that were mentioned here. Thank you for all the contribution. I learned a lot from the different perspectives. Thank You.

One word: FAIL. Now don't come back here and say I'm scaling in every penny it moves up. Because you been bsing everywhere on this forum, especially on the delta inventory forum, that you helped closed down. Now rest in peace.

As far as CAPM in business school goes, it's a good starting point isn't it? I mean how else would you introduce this concept? Anyone can look at the assumptions and say this is not how real world works. But, is there an easier way to introduce this idea of risk when you have to find intrinsic...

Wow! Great insight guys. Thanks to all who chipped in.

I know he doesn't believe in CAPM etc. This question was asked in class and have to do a paper on it. I think I know the answer here now. He basically says we don't focus on the unpredictable risk in a firm, and we only focus on things like CAPM and M&M model for finding risk. How you would...

Well for M&M model, we use capm to find return on equity don't we? So it is tied into it.

I fail to understand what you guys are talking about. But the CAPM equation is as follows. Risk free rate + Beta(Market Risk Premium). So what does this tell you in accordance with the mayhem we saw in 2008?

Only reply if you know what Capital Asset Pricing Model (CAPM) is and have read the book Fooled by Randomness. Thanks. Question: How would you use CAPM and the Black Swan Principle to explain the severe decline in equity values in late 2008 and early 2009? One obvious is hidden risk that...