You provided no evidence why your stock picks might grow at 5% in the long run. So, if you are waiting for me to ask, here we go: Please provide evidence.I have already provided you the model. Expected return is yield + growth + multiple expansion. Yield is obvious at 10%, growth is estimated to be 5% plus, and multiple expansion is another 5%. You are welcome to question how I got these numbers but it seems you are not interested in my model and never really asked anything about it.
CAPM theory is everything about market return and market beta. That seems irrelevant to the discussion because the strategy is very different from the market and not trying to beat the market. I have zero interest and made no prediction about the market’s return, which could be higher or lower than my portfolio.
This is like the rental property I bought a few years ago. I estimated I’ll get a 15% cash on cash return plus 5% growth. I’m good with that. Nobody asked me to use CAPM theory to measure my rental property’s risk or prove it will beat the market. But if you want you are definitely welcome to try to measure it.
If you have no interested in measuring or trying to determine the risk of your investment, if you are also not interested in beating (for example) a passive stock market index by the end of your investment horizon, and if apparently you are not even interested in maximizing your fortunes through your investments, then I'm not sure what your objective might be. I think most people in this forum strive to maximize their risk-adjusted investment returns through asset allocation.
Statistics: Posted by comeinvest — Mon Jun 10, 2024 2:14 am — Replies 196 — Views 30334