Comments on: Introducing the Capital Asset Value Model (CAVM) http://valuehuntr.com/2009/05/06/introducing-the-capital-asset-valuation-model-cavm/ A Value Investing Website Sun, 25 Jul 2010 19:04:30 +0000 hourly 1 http://wordpress.com/ By: Our Alternative to CAPM « http://valuehuntr.com/2009/05/06/introducing-the-capital-asset-valuation-model-cavm/#comment-256 Our Alternative to CAPM « Fri, 26 Jun 2009 12:21:34 +0000 http://valuehuntr.com/?p=868#comment-256 [...] According to Edward Thorp, the fundamental problem in gambling is to find positive expectation betting opportunities. The analogous problem in investing is to find investments with excess risk-adjusted expected rates of return. This simple premise is what allowed us to develop the Capital Asset Value Model (CAVM), which we first explained on a previous post. [...] [...] According to Edward Thorp, the fundamental problem in gambling is to find positive expectation betting opportunities. The analogous problem in investing is to find investments with excess risk-adjusted expected rates of return. This simple premise is what allowed us to develop the Capital Asset Value Model (CAVM), which we first explained on a previous post. [...]

]]> By: Monthly Update: Valuehuntr Portfolio Gains 89% in May « http://valuehuntr.com/2009/05/06/introducing-the-capital-asset-valuation-model-cavm/#comment-216 Monthly Update: Valuehuntr Portfolio Gains 89% in May « Mon, 01 Jun 2009 03:50:09 +0000 http://valuehuntr.com/?p=868#comment-216 [...] We select stocks which are undervalued and with a catalyst in place. However, as a group, our stocks are managed based on their price advances relative to intrinsic value using CAVM, a model we have developed as an alternative to the CAPM model used by analysts and professors today. CAVM allows us to account for risk by defining it as the probability of loss rather than as volatility.To read more about CAVM, see our explanation here [...] [...] We select stocks which are undervalued and with a catalyst in place. However, as a group, our stocks are managed based on their price advances relative to intrinsic value using CAVM, a model we have developed as an alternative to the CAPM model used by analysts and professors today. CAVM allows us to account for risk by defining it as the probability of loss rather than as volatility.To read more about CAVM, see our explanation here [...]

]]> By: History of ACF Fiorentina » Blog Archive » Mean and predicted response http://valuehuntr.com/2009/05/06/introducing-the-capital-asset-valuation-model-cavm/#comment-166 History of ACF Fiorentina » Blog Archive » Mean and predicted response Tue, 12 May 2009 07:36:28 +0000 http://valuehuntr.com/?p=868#comment-166 [...] Introducing the Capital Asset Valuation Model (CAVM) [...] [...] Introducing the Capital Asset Valuation Model (CAVM) [...]

]]> By: ValueHuntr http://valuehuntr.com/2009/05/06/introducing-the-capital-asset-valuation-model-cavm/#comment-151 ValueHuntr Thu, 07 May 2009 19:06:16 +0000 http://valuehuntr.com/?p=868#comment-151 Thanks Widemoat. T is a variable which we have no control over. I suggest coming up with a worst-case scenario T for each position and averaging them. Notice that if T is large, you would have to compensate with a greater MOS to get the same expected returns. Thanks Widemoat. T is a variable which we have no control over. I suggest coming up with a worst-case scenario T for each position and averaging them. Notice that if T is large, you would have to compensate with a greater MOS to get the same expected returns.

]]> By: widemoat http://valuehuntr.com/2009/05/06/introducing-the-capital-asset-valuation-model-cavm/#comment-150 widemoat Thu, 07 May 2009 17:34:11 +0000 http://valuehuntr.com/?p=868#comment-150 Absolutely excellent. Very well presented and illustrated. Better submit it to a finance journal. I'm curious about your assumptions for T. 1 year would be great--but few price/value discrepancies get resolved that quickly, without a catalyst. In the case of David Einhorn and Allied Capital, it was many years. Any additional thoughts about picking a value for T? Absolutely excellent. Very well presented and illustrated. Better submit it to a finance journal.

I’m curious about your assumptions for T. 1 year would be great–but few price/value discrepancies get resolved that quickly, without a catalyst. In the case of David Einhorn and Allied Capital, it was many years.

Any additional thoughts about picking a value for T?

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