Business Value
I Bought the Stock and the Price Fell — What Should I Do Now?
Buying a stock is relatively easy. The difficult part often begins afterward… Suppose you buy a stock — and a few weeks or months later, the price falls […]
EON Investment Insights
Understand stock price as a forecast
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Valuation
Where Should We Look for Good Investment Opportunities?
Where should an active investor look for opportunities? Benjamin Graham’s framework compares market timing, growth stocks, bargain issues and special situations—with a focus on the gap between price and value.
Behavioral Finance
What Mistakes Should an Active Investor Avoid?
An active investor is not simply someone who takes more risk. In Benjamin Graham’s sense, an active investor is someone willing to spend more time and effort analyzing […]
Market Multiples
Total Shareholder Return (TSR) Decoder
Why P/E alone can mislead: a McDonald’s case study explaining total shareholder return through growth, reinvestment, margins, earnings yield and valuation changes.
Risk
What Is Real Investment Risk?
Benjamin Graham’s Rules for the Defensive Investor Chapter 5 of The Intelligent Investor begins with a practical question: if an investor does not want to monitor the market […]
Behavioral Finance
When the Market Falls — Should You Buy or Sell?
In *The Intelligent Investor*, Benjamin Graham suggests that a defensive investor should divide a portfolio roughly equally between common stocks and high-quality bonds. A 50/50 split is the […]
Market Efficiency
Understanding Market
# A Rising Market Does Not Always Become a Better Investment When the stock market has delivered strong returns for many years, it becomes easier to believe that […]
Market Efficiency
Stocks vs Infaltion
Do Stocks Really Protect Investors from Inflation? In Chapter 2 of The Intelligent Investor, Benjamin Graham explains why investing in stocks is not an automatic solution to inflation. […]
Growth
A Great Company ≠ A Great Investment
As Benjamin Graham would put it, the quality and growth of a company do not determine your investment returns by themselves. What really matters is the price you […]
Behavioral Finance
What Kind of Investor Are You?
Benjamin Graham’s first chapter in The Intelligent Investor gives a very interesting explanation of what investing actually is and the mindset we should bring to it. To sum […]
Risk
Fixed Coupons and Upfront Payments in CDS Contracts
For practical reasons, the coupon on CDS contracts within the same series usually remains fixed for new trades, even though the market spread changes over time. As a […]
Risk
CDS Indices
While a single-name Credit Default Swap transfers the credit risk of one company, a CDS index applies the same principle to a standardized portfolio of companies. Through a […]
Interest Rates
CDS vs Bond Spreads
What Additional Return Does a Corporate Bond Offer Compared with a Risk-Free Instrument? Bond Spread A buyer of a corporate bond assumes the company’s credit risk. If the […]
Risk
Valuation of CDS
The protection buyer periodically pays the CDS spread, while the protection seller assumes the obligation to compensate for losses if the organization defaults. However, this raises the main […]
Risk
Credit Default Swaps (CDS)
A CDS is an instrument/contract that provides protection against the default of a specific company or government. There are three parties or elements in the contract: Protection buyer […]
Risk
Credit-Metrics Model
We discussed the Vasicek model that address to question: “how many borrowers may default in an adverse economic scenario?” This model is particularly useful when we have a […]
Risk
Vasicek Credit VaR Model
The Vasicek Value at Risk model is a special case of the Gaussian Copula model. To recall, in the previous posts we started with a simple idea: every […]
Risk
Podcast Episode: Gaussian Copula And Default Correlation
Pip: Eon Investment — where the question “how many companies might collapse at once” gets a mathematically elegant answer, and somehow that’s reassuring. Mara: Today we’re covering default […]