The Price of Risk: An Equity Risk Premium Monologue!

I start my valuation classes with a question of whether valuation is an art or a science, and I argue that it is neither; it does not have the precision that characterizes a science and unlike an art, it does come with principles that constrain you on what you can and cannot do. I describe valuation as a craft, where you learn as you value companies, and in the process, there are times where you…