Day: January 20, 2021

Data Update 2 for 2021: The Price of Risk!



Investors are constantly in search of a single metric that will tell them whether a market is under or over valued, and consequently whether they should buying or selling holdings in that market. With equities, the metric that has been in use the longest is the PE ratio, modified in recent years to the CAPE, where earnings are normalized (by averaging over time) and sometimes adjusted for inflation. That metric, though, has been signaling that stocks are over valued for most of the last decade, a ten-year period when stocks delivered blockbuster returns. The failures of the signal have been variously attributed to low interest rates, accounting mis-measurement of earnings (especially at tech companies), and by some, to animal spirits.  In this post, I offer an alternative, albeit a more complicated, metric that I believe offers not only a more comprehensive measure of pricing, but also operates as a barometer of the ups and downs in the market.

The Price of Risk

The price of risk is what investors demand as a premium, an extra return over and above what they can make on a guaranteed investment (risk free), to invest in a risky asset. Note that this price is set by demand and supply and will reflect everything that investors collectively believe, hope for, and fear.

Does the price of risk have to be positive? The answer depends on whether human beings are risk averse or not. If they are, the price of risk will be reflected in a (Read more...)

Data Update 2 for 2021: The Price of Risk!



Investors are constantly in search of a single metric that will tell them whether a market is under or over valued, and consequently whether they should buying or selling holdings in that market. With equities, the metric that has been in use the longest is the PE ratio, modified in recent years to the CAPE, where earnings are normalized (by averaging over time) and sometimes adjusted for inflation. That metric, though, has been signaling that stocks are over valued for most of the last decade, a ten-year period when stocks delivered blockbuster returns. The failures of the signal have been variously attributed to low interest rates, accounting mis-measurement of earnings (especially at tech companies), and by some, to animal spirits.  In this post, I offer an alternative, albeit a more complicated, metric that I believe offers not only a more comprehensive measure of pricing, but also operates as a barometer of the ups and downs in the market.

The Price of Risk

The price of risk is what investors demand as a premium, an extra return over and above what they can make on a guaranteed investment (risk free), to invest in a risky asset. Note that this price is set by demand and supply and will reflect everything that investors collectively believe, hope for, and fear.

Does the price of risk have to be positive? The answer depends on whether human beings are risk averse or not. If they are, the price of risk will be reflected in a (Read more...)

Building Better: Drive Capital & Forge Biologics



Welcome to the NVCA Blog series, Building Better, where we celebrate the dynamic relationship between our VC members and their innovative portfolio companies around the nation. For today’s Building Better, we spoke with Molly Bonakdarpour, Partner at Drive Capital, and with Timothy Miller, CEO, President, and Co-Founder of Forge Biologics, a Drive Capital portfolio company. Learn about their partnership in the Q&A below!

Drive Capital: Molly Bonakdarpour

Give us some background on Drive Capital: How did the firm start, what is Drive’s mission and how does the firm strive to meet its goals?

The idea for Drive started during the transition to cloud computing where our founders saw first-hand that it was cheaper than ever to start a technology company. This reframed for them where companies should be built thus our thesis “build where you’re strongest”.

When Drive started in 2013, our focus was on the Midwest as a great place to “build where you’re strongest”. The Midwest has 150 of the Fortune 500 companies, the fourth largest GDP in the world, and incredible universities with access to talent. All these factors played a role in planting our roots in Columbus. We now have $1.2B under management across three venture funds and one expansion fund. As we iterate on this thesis, we are thinking about the advantage’s geography can give a company vs. deciding to build a company in one place or another.

What does Drive look for in a partner when choosing to invest in a (Read more...)

A new day for our country


This post is by bijansabet from B I J A N


In a few hours the United States of America will have a new President.

Trump leaves office disgraced with the lowest approval rating in history — the majority of this country understands who serves as President matters. Record turnout, record voters, and our democracy endures.

There are serious, daunting challenges ahead for this country to be sure. But on day 1, we have the most talented, & diverse cabinet to serve and Biden will issue seventeen executive orders to get us on the right path.

I am optimistic, I am hopeful and I am inspired.

My new book: To University and Beyond: Launch Your Career in High Gear


This post is by David from David Teten's blog


You can now pre-order my forthcoming book, To University and Beyond: Launch Your Career in High Gear. People seem to like it:

“This book delivers a roadmap for students looking to maximize their investment in higher education, offering the tools necessary to stand out among the crowds of eager, young professionals.”

– Karim Faris, General Partner, GV (Formerly Google Ventures)

“After reading this book, students will know not only what it means to be in the driver’s seat of their education and professional careers, but also what it looks like to play an active role in their own success.”

– Congressman Peter Deutsch, Member of the US House of Representatives (1993-2005)

“The University and Beyond is the book that I wish I’d had as I was entering college and then embarking upon my own career. While there are elements of inspiration in it, the book stands out for its practical, actionable advice. In an increasingly competitive world, The University and Beyond will show you how to stand out as you embark upon your career, and it does so in a practical, actionable way. How I wish every newly minted college graduate I ever hired would have read The University and Beyond and done what Mandee and David recommend!  This is by far the most practical guide to help you find early career success.”

– Patrick Mullane, Executive Director, Harvard Business School Onlin

I started writing this at age 20, and have been expanding it over the years, all the way (Read more...)