Friday, November 22, 2024

Top 10 Posts from 2022: Fama and French, Damodaran, the Equity Risk Premium

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1. Fama and French: The Five-Factor Model Revisited

How well has Eugene F. Fama and Kenneth R. French’s five-factor model explained returns? Derek Horstmeyer, Ying Liu, and Amber Wilkins share their analysis.

2. Tell Me a Story: Aswath Damodaran on Valuing Young Companies

When valuing companies, “You don’t have to be right to make money,” Aswath Damodaran says. “You just have to be less wrong than everybody else.” Roger Mitchell considers Damodaran’s insights.

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3. The Elephant in the Room: The ESG Contradiction

The inherent conflict between the “E,” the “S,” and the “G” in ESG investing can no longer be ignored. As much as we might wish otherwise, the goals embedded in these initials don’t always align with one another, Andrea WebsterPaul Smith, CFA, and Kübra Koldemir contend.

4. How Long Can Russia Withstand the Sanctions?

The toll of the economic embargo on Russia will be enormous, Joachim Klement, CFA, predicts. He goes on to calculate just how enormous.

5. Investing’s First Principles: The Discounted Cash Flow Model

Brian Michael Nelson, CFA, explains why the DCF model is not only relevant to today’s market, but remains an absolute necessity.

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6. Retirement Income: Six Strategies

How can we mitigate sequence of returns risk (SoRR)? Krisna Patel, CFA, shares half a dozen strategies to safeguard clients’ retirement portfolios.

7. Building a CAPM That Works: What It Means for Today’s Markets

“The capital asset pricing model (CAPM) is a marvel of economic scholarship,” Jacques Cesar writes. “The problem is that it doesn’t always work in practice. So, we fixed it.”

8. Equity Risk Premium Forum: Don’t Bet Against a Bubble?

Cliff Asness, Rob Arnott, Roger G. Ibbotson, and other luminaries explore the nature of bubbles and the momentum factor. Paul McCaffrey provides a synopsis of their dialogue.

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9. A Tale of Two Suits: The Three Capitals of Career Success

According to Eric Sim, CFA, human capital, financial capital, and social capital helped build his career in finance. Paul McCaffrey considers Sim’s compelling personal story and how we can apply the lessons to our own careers.

10. From No to Yes: Persuading Clients with the 3Ps Method

In this adaptation from Small Actions: Leading Your Career to Big Success, Eric Sim, CFA, and Simon Mortlock discuss the 3Ps method — perseverance, perspective, and positivity — and how to use it to transform rejection into approval.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©Getty Images / RomoloTavani


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