Where CAPM Went Bonkers – A Charlie Munger Perspective

When most investors read about Cost of Equity, they encounter the classic formula: Re = Rf + β × (Rm – Rf) In other words, the expected return on equity equals the risk-free rate plus a risk premium based on market volatility. On paper, it looks neat. On paper, it promises a precise measure of … Continue reading Where CAPM Went Bonkers – A Charlie Munger Perspective