Jim Grant: Life Would Be Simpler If Valuation Followed Law Of Gravity

HFA Padded
Mark Melin
Published on
Updated on

Jim Grant questions the levels of levity in the stock market in his recent issue of Grant’s Interest Rate Observer. Formula for stock price valuation off Citing financial basics, Jim Grant writes: “Repeat after us, Chartered Financial Analysts: The price of a common stock is the present value of the sum of its future cash flows discounted by an appropriate rate of interest (the risk-free rate pus some premium),” Grant notes, citing statistics that only 14.8 percent of time the 10-year Treasury yield has been below 3%. “Life would be simpler if humans responded to the dividend discount model as obediently as…

Login if you are HedgeFundAlpha Subscriber.

HFA Padded

Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.