CAPM - What is the Capital Asset Pricing Model

[@edit_manger]

I learned more in these 5 mins about CAPM then anything with my investments professor

[@ozandogacerdem8450]

This comment represents me also.

[@lbrandaovieira5]

Outstanding, isn't it?

[@menzoznem]

Professors are there to do their research, not to teach. The level of teaching in my economics faculty is often of so low quality that they should really hire lecturer's that are primarily there to teach and will be replaced if they are badly reviewed. As of now they have a monopoly on their course and have no incentive to improve.

[@paulkwando6419]

I to

[@melissatresler5903]

me too, it's really way better than my text book

[@htoolay6581]

whenever I can't understand in class, I came to youtube. Thank you so much to the people who shared their knowledge generously. A big THANK goes to KZbin as well.

[@LAinLA86]

Its amazing how these videos are so quick, concise, and easy to learn from

[@Potencyfunction]

Why you don t go and read at the library or buy a book and learn because it will save you wasting time for nothing. Good luck with your future investements, go and catch up with people lifestyle.

[@lissiemackintosh]

this video was absolutely brilliant, explained in five mins what my lecturer tried to explain in 5 lectures

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere??

[@achozenshaman]

You give the most thorough and understandable explanations and you include all the little things that everyone else ignores and takes for granted. You're a great teacher! Thank you so much! Subscribed!

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere?

[@dendyindramawan6450]

Thank you for the video. The simplest and clearest video about CAPM.

[@Omnomtoto]

This was so much more concise and clear than my professor who spent 30 minutes talking in circles around this

[@WallStreetUniversity]

A great resource for CAPM. One of the foundational concepts of our time.

[@waseemahmed2567]

I got no words. You explained it in a very neat and a short way. Thanks a ton Sir

[@hibadebbar4617]

Your work is still paying off !!! Thank you

[@stephf4175]

just my gosh, who ever came up with all this stuff?!!🤪 but thank you for helping us non-financial folks to try and better understand it all.

[@rinkiarora2808]

The video has the most apt clear and detailed explanation of CAPM, you made it so easy Sir. Thank you!

[@everything_is_on_fire3155]

Your approach is really straight nd indept as well. Loved the way you explained it. Waiting for next video.

[@oliviazuniga4677]

Loved the quick and easy explanation. Graphics are awesome

[@gigglinghazker]

absolutely amazing!!! so many things shown in really simple and understandable way! even if you’re not native speaker! thanks!

[@aWildJersh]

You explain it better than my professor. I am both mad and impressed lol

[@abhimanyujaiswal2096]

I watched this video 1st time and in 1st time your content and talking impressed mee.... This 1st time happening with

[@keithjoshuamassi9785]

So easy to understand. Thanks

[@wafaaahmed9939]

I appreciate the clear and easy explanation.

[@joshuafancher3111]

Thank you! The link between CAPM and a DCF model now makes sense.

[@classone9001]

Thanks a ton man. Absolute learning in just 5 mins. Thanks again.

[@sidrahbilal3877]

Sir, that was the best explanation, period!

[@semboersen2632]

The MVP himself. Thank you so much!

[@internetdigitalentrepreneu1235]

Excellent - well done. Clear, concise and authoritative!!!

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere?

[@kakitlau9124]

the explanation in video is!! It's amazing and highly recommended to everyone!

[@Leandrasjones]

love the video, definitely not for the beginner beginner as you went over some concepts persons may have to stop and find out more about before continuing, but the level of what you covered in such a short space of time is excellent. Thanks for sharing.

[@rjamesify]

Good luck to y’all in college hope you guys prosper.

[@kristiecarbaugh117]

Very helpful- thank you for explaining this so thoroughly and taking it one step further to explain use case for where to apply knowing CAPM!!

[@Samborondon11]

Wow I finally understand that Discount rates can vary depending on the pricing model

[@moregoldmoresunshine1987]

Wow this was absolutely amazing thank you. Finally understand the bigger picture.

[@samuelchong4085]

Thank you for the detailed explanation!

[@chlarissamaeurbi5957]

Thank you for this! Very helpful! Hoping to pass my exam today 🙏🙏

[@lldbaby]

Thanks for sharing your knowledge. The video simple and clear. Very helpful.

[@bamschilders]

your voice is great. the explanation is great. the examples are awesome, simple but very effective.

[@mike55mike55mike]

great educational content and stock analysis on this channel - love it

[@samiacampbell1792]

Thank you! All the other videos on this are confusing

[@aleras574]

because he is making it too simple... and this is the only thing you probably can understand

[@LearntoInvest]

Is too simple a bad thing? How should I have complicated it to make it better?

[@davidharte9616]

Love the Boston Accent! I subscribed, helped a lot with my Finance Final!

[@LearntoInvest]

LOL, you picked up on the accent. I try to mask it. and thanks! I'm glad you found it helpful

[@jmc3461]

@@LearntoInvest When you said popular at the end it got real obvious lmao

[@bigmilt16]

That was clearer than an Ivy League Professor. Hold this sub.

[@justinrrizzo]

When YT videos are better than my paid Kaplan materials....

[@HurricaneTrist]

Thanks! Taking my Series 66 tomorrrow

[@eleanorfulani]

This video really made me want to learn even more. Wish our curriculum was this interesting. Great Job!

[@mkingers1]

Perfectly explained thank you!

[@LearntoInvest]

Thanks :)

[@Rajeshkumar-li2dn]

💯 Wow all the videos are great here, particularly the way of explanation is awesome. My financial thirst ends here. Great work and God bless you. Love from india ❤❤❤

[@TheSutianneli]

In the end you said discount rate or expected return, are they the same? I know CAPM calculates the expected return of a security..

[@LearntoInvest]

What do you think of CAPM? Do you ever use it when valuing a stock? I often use CAPM in my Dow 30 Analysis Video Series kzbin.info/aero/PL7fralS8vIb5jGOwi2dCQ3iYC-AinxRtu

[@visheshgoyal3999]

i wish my finance professor had seen this video. thank you for your help! finally understood something in this topic xD

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere?

[@visheshgoyal3999]

@@jessicawiley2814 seems like you suddenly noticed multiple people. I see you've commented the same thing several times. I will report your comment. Thank you

[@ghaubold35]

Good Vid. I actually became a subscriber because of these investing basics videos. And i look at the stock analysis videos as great add ons to demonstrate how this stuff can be used in real life. Thanks for coming back to the basics.

[@duasanam9150]

So nicely explained

[@quanttube]

You explain things well. Liked it. I'd subscribe to your channel even if you haven't asked for it at the end. It's the quality of the content that persuades people to subscribe, not the request made by the video creators. :)

[@LearntoInvest]

I appreciate that 👍🙂

[@kyandharmaputrawidodo8036]

Can you make the video about Arbitrage Pricing Theory? I need to presentate next week but i don't know about apt

[@LearntoInvest]

That’s a great idea, let me see if I can get one together fairly quickly for ya 👍😀

[@johnzarznia6814]

I'm glad you made this video. I looked up CAPM after the BA video. You make it sound so easy. Even though I know its not. Good Video!

[@KamalTaybi-jd9fh]

Can you do an explanation of DCF model for your next video? thank you.

[@LearntoInvest]

Good one. I'll see if I can get that one done by next week. Thanks for the suggestion.

[@fredericostuckenbruck2458]

Excelent explanation please make movies on other topics of valuation

[@ericdelvalle2056]

great explanation. if only my professor knew how to explain.

[@afhoadpfhafpaiofhap]

So well explained. love the videos.

[@UmTheMuse]

Does it ever make sense to customize the risk-free rate for our particular situation? For example, if you're in debt and the interest rate is higher than the yield for 10-year bonds?

[@LearntoInvest]

I wouldn't customize the risk free rate since the goal of CAPM is essentially to calculate the cost of equity. And we use the risk free rate to give us a baseline... Assuming we are using CAPM to help calculate our required rate of return, we take this CAPM calculation and apply it to a WACC calculation kzbin.info/www/bejne/ZprRoqpvmKh9pK8 that is where we can make adjustments for debt and the cost of that debt. Hopefully this helped :)

[@Potencyfunction]

@UmTheMuse 5 years ago-You cant not understand that this is not a case study about debt or a company in debt ?! There are 2 shorter ways to calculate your debts ( interest rate) . Either you research the Solidity and Liquidity grad of your company ( but that is Chinese for you) , either you learn the Annuity and compound interests formulas. This is discounting talking the future to present value . If you have debts you need to apply the calculator, which is on your online bank website. Because I see you confuse the cabbage with the pickles.

[@JakeDoesMusicSometimes]

This is an extremely well done video geez thank you

[@AhmadAmr98]

dude im clapping youre just awesome thank you

[@LearntoInvest]

Thanks 👍👍😁

[@Intothemarket101]

Thank you so much for sharing this useful data ! Greatly appreciated.

[@rifatbaranayarci4115]

Only helpful and useful stuff. Thank you!!

[@albinwiklund4557]

Great video, just one question. What do you do if the risk-free rate is negative? It's about -0,1 where I live, do I plug that in or do I skip that step?

[@196nagahori9]

Thank you for this great content! Love from japan

[@andyhedges4713]

Love your videos! Great presentation of information. Very clear and informative. Helping me massively along my investing journey. Many Thanks and keep up the great work. 👍👍👍

[@slopsloppier5569]

Hi great vid man, 2 questions...where did you get the $1000 dollars from as your expected cash flow? and why would you expect $1000 in 2 years?

[@CleverTOOTH]

Its an example, the expected cash flow can be any number

[@danielvillela7272]

A didática é tão boa que consegui assimilar muita coisa mesmo não tendo domínio da língua inglesa.

[@JosueLopez-jx1th]

Wonderful explanation ! Thanks !

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere?

[@randomness2622]

at 3:07, my calculator says Facebook estimate of return = 10.8%

[@willfindjr]

Another great video!! excellent level of detail and useful examples.

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere??

[@davidcisneros9214]

Thank you for this perfect video! Could you please also make a video explaining the Arbitrage Pricing Theory and the Multifactor Model please? I will have an exam soon about those 3 and I don't understand anything from my investment professor :(

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere?

[@nicoanastasio3141]

great video, not sure where you take the $1000 from the second calculation from?

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere?

[@mandarnandre7387]

Thank you!! ( Imagine I said it in Boston Accent) Please make a video for using CAPM for portfolio.

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere??

[@loyaranha]

Thank you so much for your efforts with making these, Could you do one on the Fama and French 5 factor model?

[@MrMineHeads.]

You could just look it up. It adds four more factors, one called SMB (small minus big) which is the risk of a company for being "small" (i.e. low market cap ~1B or lower), one called HML (high minus low) which is the risk of a company being "cheap" (high book/price vs low book/price), one is called RMW (robust minus weak) which is (counterintuitively) the risk profitable companies have, and finally one for CMA (conservative minus aggressive) which is the risk that firms that invest conservatively have. All these are tremendously difficult to calculate accurately individually, but the market as an aggregate of millions of investors gets those risks spot on in the long run most of the time (>95%).

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere??

[@danbolord6059]

Great material :)

[@carlosgomez-gc2is]

you need a patreon account dude. Good job as always!

[@ramiro4533]

Thanks for this content. Have you uploaded the Arbitrage Pricing Theory video?

[@strategicactionservices2206]

When did we start using the 10 year note for the Rf? I thought short-term treasuries were used for the Rf.

[@slothner943]

Hello! Great video! I have a question - what happens if the Rf variable is negative? And what does that mean? (It is negative in sweden right now)

[@LearntoInvest]

That's a great question, for me I would probably just use 0 instead of a negative. Yes if we use 0 we end up with a higher number, but for me that's a more conservative approach. But that's just my opinion. Since negative rates are somewhat uncharted waters, I haven't found too many studies on it

[@slothner943]

@@LearntoInvest okey, interesting! Does that mean that the CAPM modell is not as useful or is it still useable in these conditions? Thanks for the reply!

[@LearntoInvest]

@@slothner943 I think it is still useable. But since we are in uncharted waters, its less tested in this scenario. Personally, I think it is still useful, I just think it makes sense to be cautious, which is why I suggest using zero instead of a negative number. But it should work mostly the same as it would with positive rates.

[@slothner943]

@@LearntoInvest cool! Okey thank you for replying!👊

[@LearntoInvest]

@@slothner943 Thanks for the support! :)

[@buhle6407]

Perfect!!. Thank you

[@salao000]

Sorry for my ignorance. But how did you go from 8.94% as the result of the CAPM to 1.0894^2. Thanks for this great videos.

[@Andrea-sl1xv]

up

[@neelmdchy]

Well, 8.94%=0.0894 Here, (1+0.0894) = 1.0894 And the to the power 2 is the "Year of cashflow" Thus, 1.0894^2 Hope it helped

[@kimie3001]

tq for the video

[@Tyokok]

so those returns are all annually. always use annually? or see different case? if you have an example for other frequency? thanks!

[@gniginny197]

Thanks! It's helpful!

[@LearntoInvest]

I'm glad you liked it!!!!

[@timothydavis3754]

Just ran into this channel. Great video, I love how you broke down the formula and explained it clearly. I would love a video about arbitrage pricing theory and multi factor models. Thanks!

[@raghadfinance2960]

Very helpful, thanks!

[@alemberhe5952]

thank u very much short and clear

[@tubarao1143]

Really nice video! Asa question, shouldn't "expected return of the market" be the % change in the respective industry and not in the overall market? By using 9% we are considering that oil industry will grow as fast as 5G companies?

[@nicholasdranfile9312]

I love your voice. also superb video explanation

[@SurajP16]

thanks, it was really helpful

[@Nz-randy17]

sorry, can you explain the part which is 1,000/1.0894^ or in my perception 1,000/1+capm^. What formula is it or how to understand it? Thank you

[@ArtHoward]

This is the first one of your animated videos I've seen. This format works perfectly for you. The script and your narration read are right on. In the "live" videos I could sense your nerves, but this format lets you relax and get your ideas across.

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere?

[@anthonyjovceski]

Great explanation!

[@Ensavoirmoins]

Bêta = Cov (Rm, Ra) / Var (Rm) Just a clarification 🙂

[@Potencyfunction]

Halloo central nervous system listen up what he is saying: Beta is the relationship between INVESTMENT AND MARKET. MARKET BETA IS IMAGINARY 1 BY DEFALUT.

[@ulviaslanli6477]

Hi,can you solve it please If you have a portfolio with a market value of $ 100 million and a beta (measured against the S&P 500) of 1.5, then if the market rises by 10 percent, what value would you expect your portfolio to have

[@jessicawiley2814]

Sorry for writing you, just out of curiosity your page come up on my suggestion friend list so I was just wondering if I knew you from somewhere?

[@bobcook6780]

This makes it seem like a beta of 1.0 means that the stock is perfectly correlated with the market. From my understanding, this is misleading because beta is the volatility (not correlation) - meaning, an asset with a beta of 1.0 has the same volatility as the market, but could theoretically be totally uncorrelated. Am I correct in saying this?

[@biglebowsky1988]

is there a video about the arbitrage pricing theory ?

[@maddmotorz6252]

Im getting .03+.99(.09-.03)=.0612 we multiply the sum in parenthesis by 1.02 right?

[@dhavalpatel9578]

Please also explains APT & Multi factor theory.

[@joeriley2936]

I'm confused by how he ended up diving by the 1.0894^2 toward the end. Could anyone explain?

[@raheem201231]

1.0894 is the discount rate. 2 refers to the years of the investment.

[@akbaralikomilov9645]

Great explanations thank you When can we watch your Videos about Arbitrage Pricing Theory and Multi Factor Models

[@LearntoInvest]

Very Good Point. I've got them in the queue. I'll let you know as soon as they are ready.

[@TheBigCarnivore]

Damn, this was good🤩

[@aakashtiwari2472]

Short and crisp!