The Missing Risk PremiumEric G. Falkenstein
The Missing Risk Premium
by Eric G. Falkenstein · first published 2012
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…your "foolish" (in hindsight) risk aversion. edit: not sure why the downvotes. if you are interested in a treatment of peer-based utility functions that affect risk premia, see https://www.amazon.com/Missing-Risk-Premium-Volatility-Inves... -- in other words, risk may not be best measured as volatility but instead as the expected relative wealth gain/loss to your market peers. for private employee equity, those peers…
on “Former Uber employees have gone into debt to exercise options they can’t sell” ↗The book The Missing Risk Premium covers a lot of the evidence. The author give a synopsis here: https://falkenblog.blogspot.com/2013/07/missing-risk-premium... Low volatility investing is based around the observation that low volatility…
on “The Rate of Return on Everything, 1870–2015 [pdf]” ↗Jackass Investing and Millionaire Fastlane are good layman books. Expected Returns is a more advanced but accessible one. Also the Missing Risk Premium is good food for thought since if its thesis is correct nearly everything you read about risk management in typical indexing investing literature is bogus and the opposite of true. Tl;dr is two much…
on “Ask HN: I have $450K cash, what should I do to maximize my return?” ↗