SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Internet Analysis - Discussion
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Chuzzlewit who wrote (108)2/7/1999 4:54:00 PM
From: Reginald Middleton  Read Replies (3) of 419
 
Again I posit that risk, from an investor's perspective cannot be truly measured by volatility. Few on this board would consider a company that has 28% volatility and 7 years of strong capital appreciation risky. It may be from an academic standpoint, but not from a realistic viewpoint. Investors percieve risk as the potential for loss, not the text book definition of deviation from expected return. A value at risk methodology is much more grounded in reality, IMHO.

From the investors perspective, you could actually be overstating or understating the risk premium by adding components to it that are not truly considered risky, such as the probability that MSFT will spike up sharply 4 times over the next year, driving up its volatility. That is understandably characterized as reward by long investors, and not risk. A downward spike is a "risky" occurence.

In trying to fix the problems with CAPM, be sure not to ignore the all too academic pitfalls inherent in so manh of those theoretical models.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News