CAPM - What is the Capital Asset Pricing Model

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  • เผยแพร่เมื่อ 23 ก.ย. 2018
  • In this video, we look at the capital asset pricing model - CAPM for short. We dive into a quick example and look at how it can be used to help value a stock.
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ความคิดเห็น • 275

  • @dianesullivan5338
    @dianesullivan5338 หลายเดือนก่อน +453

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    • @HildaBennet
      @HildaBennet หลายเดือนก่อน +2

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      @PennyBergeron-os4ch หลายเดือนก่อน +1

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      @JosephineKenney หลายเดือนก่อน +1

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      @PennyBergeron-os4ch หลายเดือนก่อน +1

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    • @JosephineKenney
      @JosephineKenney หลายเดือนก่อน

      She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.

  • @edit_manger
    @edit_manger 3 ปีที่แล้ว +509

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

    • @ozandogacerdem8450
      @ozandogacerdem8450 3 ปีที่แล้ว +16

      This comment represents me also.

    • @lbrandaovieira5
      @lbrandaovieira5 3 ปีที่แล้ว +5

      Outstanding, isn't it?

    • @menzoznem
      @menzoznem 3 ปีที่แล้ว +9

      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
      @paulkwando6419 3 ปีที่แล้ว

      I to

    • @melissatresler5903
      @melissatresler5903 3 ปีที่แล้ว

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

  • @htoolay6581
    @htoolay6581 4 ปีที่แล้ว +169

    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 TH-cam as well.

    • @LAinLA86
      @LAinLA86 ปีที่แล้ว +1

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

    • @Potencyfunction
      @Potencyfunction 5 หลายเดือนก่อน

      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.

  • @achozenshaman
    @achozenshaman 2 ปีที่แล้ว +17

    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
      @jessicawiley2814 2 ปีที่แล้ว

      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
    @dendyindramawan6450 4 ปีที่แล้ว +10

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

  • @lissiemackintosh
    @lissiemackintosh 3 ปีที่แล้ว +34

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

    • @jessicawiley2814
      @jessicawiley2814 2 ปีที่แล้ว +1

      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??

  • @Omnomtoto
    @Omnomtoto 2 ปีที่แล้ว

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

  • @waseemahmed2567
    @waseemahmed2567 2 ปีที่แล้ว +1

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

  • @everything_is_on_fire3155
    @everything_is_on_fire3155 4 ปีที่แล้ว +5

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

  • @WallStreetUniversity
    @WallStreetUniversity ปีที่แล้ว +1

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

  • @kristiecarbaugh117
    @kristiecarbaugh117 3 ปีที่แล้ว +1

    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!!

  • @joshuafancher3111
    @joshuafancher3111 5 ปีที่แล้ว +8

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

  • @rinkiarora2808
    @rinkiarora2808 3 ปีที่แล้ว

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

  • @hibadebbar4617
    @hibadebbar4617 3 ปีที่แล้ว +2

    Your work is still paying off !!! Thank you

  • @Leandrasjones
    @Leandrasjones 3 ปีที่แล้ว +12

    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.

  • @bamschilders
    @bamschilders 4 ปีที่แล้ว +4

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

  • @oliviazuniga4677
    @oliviazuniga4677 2 ปีที่แล้ว +1

    Loved the quick and easy explanation. Graphics are awesome

  • @gigglinghazker
    @gigglinghazker 8 หลายเดือนก่อน

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

  • @Rajeshkumar-li2dn
    @Rajeshkumar-li2dn 4 ปีที่แล้ว +3

    💯 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 ❤❤❤

  • @abhimanyujaiswal2096
    @abhimanyujaiswal2096 3 ปีที่แล้ว +2

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

  • @johnzarznia6814
    @johnzarznia6814 5 ปีที่แล้ว +5

    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!

  • @classone9001
    @classone9001 2 ปีที่แล้ว +1

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

  • @moregoldmoresunshine1987
    @moregoldmoresunshine1987 5 หลายเดือนก่อน +1

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

  • @wafaaahmed9939
    @wafaaahmed9939 4 ปีที่แล้ว +2

    I appreciate the clear and easy explanation.

  • @keithjoshuamassi9785
    @keithjoshuamassi9785 5 ปีที่แล้ว +8

    So easy to understand. Thanks

  • @chlarissamaeurbi5957
    @chlarissamaeurbi5957 3 ปีที่แล้ว

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

  • @LearntoInvest
    @LearntoInvest  5 ปีที่แล้ว +8

    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 th-cam.com/play/PL7fralS8vIb5jGOwi2dCQ3iYC-AinxRtu.html

  • @mike55mike55mike
    @mike55mike55mike 5 ปีที่แล้ว +16

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

  • @andyhedges4713
    @andyhedges4713 4 ปีที่แล้ว +7

    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. 👍👍👍

  • @ghaubold35
    @ghaubold35 5 ปีที่แล้ว +4

    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.

  • @TheSutianneli
    @TheSutianneli 4 ปีที่แล้ว +4

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

  • @lldbaby
    @lldbaby 3 ปีที่แล้ว

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

  • @kakitlau9124
    @kakitlau9124 4 หลายเดือนก่อน

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

  • @semboersen2632
    @semboersen2632 3 ปีที่แล้ว +1

    The MVP himself. Thank you so much!

  • @samuelchong4085
    @samuelchong4085 ปีที่แล้ว +1

    Thank you for the detailed explanation!

  • @tinnguyen2219
    @tinnguyen2219 5 ปีที่แล้ว +9

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

  • @sidrahbilal3877
    @sidrahbilal3877 ปีที่แล้ว

    Sir, that was the best explanation, period!

  • @HurricaneTrist
    @HurricaneTrist 2 ปีที่แล้ว +1

    Thanks! Taking my Series 66 tomorrrow

  • @JakeDoesMusicSometimes
    @JakeDoesMusicSometimes 2 ปีที่แล้ว

    This is an extremely well done video geez thank you

  • @internetdigitalentrepreneu1235
    @internetdigitalentrepreneu1235 2 ปีที่แล้ว

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

    • @jessicawiley2814
      @jessicawiley2814 2 ปีที่แล้ว

      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?

  • @buhle6407
    @buhle6407 5 ปีที่แล้ว +5

    Perfect!!. Thank you

  • @albinwiklund4557
    @albinwiklund4557 4 ปีที่แล้ว

    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?

  • @mkingers1
    @mkingers1 5 ปีที่แล้ว +4

    Perfectly explained thank you!

  • @196nagahori9
    @196nagahori9 4 ปีที่แล้ว +1

    Thank you for this great content!
    Love from japan

  • @aWildJersh
    @aWildJersh 3 หลายเดือนก่อน

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

  • @duasanam9150
    @duasanam9150 4 ปีที่แล้ว

    So nicely explained

  • @SurajP16
    @SurajP16 ปีที่แล้ว

    thanks, it was really helpful

  • @davidharte9616
    @davidharte9616 5 ปีที่แล้ว +68

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

    • @LearntoInvest
      @LearntoInvest  5 ปีที่แล้ว +11

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

    • @jmc3461
      @jmc3461 3 ปีที่แล้ว +1

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

  • @raghadfinance2960
    @raghadfinance2960 5 ปีที่แล้ว +1

    Very helpful, thanks!

  • @ramiro4533
    @ramiro4533 4 ปีที่แล้ว

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

  • @afhoadpfhafpaiofhap
    @afhoadpfhafpaiofhap 3 ปีที่แล้ว +1

    So well explained. love the videos.

  • @rifatbaranayarci4115
    @rifatbaranayarci4115 4 ปีที่แล้ว +1

    Only helpful and useful stuff. Thank you!!

  • @BOWHKARMA3
    @BOWHKARMA3 5 ปีที่แล้ว +3

    very useful, thanks a lot.

  • @gauravmohan9271
    @gauravmohan9271 2 ปีที่แล้ว

    Thanks..very informative

  • @tubarao1143
    @tubarao1143 4 ปีที่แล้ว

    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?

  • @JosueLopez-jx1th
    @JosueLopez-jx1th 2 ปีที่แล้ว

    Wonderful explanation ! Thanks !

    • @jessicawiley2814
      @jessicawiley2814 2 ปีที่แล้ว

      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?

  • @quanttube
    @quanttube 4 ปีที่แล้ว +2

    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. :)

  • @ericdelvalle2056
    @ericdelvalle2056 3 ปีที่แล้ว

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

  • @Tyokok
    @Tyokok 5 ปีที่แล้ว

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

  • @Samborondon11
    @Samborondon11 2 ปีที่แล้ว

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

  • @maddmotorz6252
    @maddmotorz6252 ปีที่แล้ว

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

  • @willfindjr
    @willfindjr 3 ปีที่แล้ว

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

    • @jessicawiley2814
      @jessicawiley2814 2 ปีที่แล้ว

      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
    @danbolord6059 5 ปีที่แล้ว +4

    Great material :)

  • @Nz-randy17
    @Nz-randy17 2 ปีที่แล้ว

    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

  • @justinrrizzo
    @justinrrizzo 4 ปีที่แล้ว +10

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

  • @timothydavis3754
    @timothydavis3754 5 ปีที่แล้ว +5

    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!

  • @danielvillela7272
    @danielvillela7272 4 ปีที่แล้ว

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

  • @fredericostuckenbruck2458
    @fredericostuckenbruck2458 4 หลายเดือนก่อน +1

    Excelent explanation please make movies on other topics of valuation

  • @stephf4175
    @stephf4175 4 หลายเดือนก่อน

    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.

  • @samiacampbell1792
    @samiacampbell1792 5 ปีที่แล้ว +6

    Thank you! All the other videos on this are confusing

    • @aleras574
      @aleras574 5 ปีที่แล้ว +1

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

    • @LearntoInvest
      @LearntoInvest  5 ปีที่แล้ว +4

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

  • @strategicactionservices2206
    @strategicactionservices2206 3 ปีที่แล้ว

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

  • @anthonyjovceski
    @anthonyjovceski 3 ปีที่แล้ว

    Great explanation!

  • @grenadianking3
    @grenadianking3 4 ปีที่แล้ว

    Where did the 1.0894 come from I know it’s the same as CAPM but how did you calculate it

  • @gatraaaaa99
    @gatraaaaa99 4 ปีที่แล้ว +1

    got it, thanks!

  • @visheshgoyal3999
    @visheshgoyal3999 3 ปีที่แล้ว +1

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

    • @jessicawiley2814
      @jessicawiley2814 2 ปีที่แล้ว

      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
      @visheshgoyal3999 2 ปีที่แล้ว

      @@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

  • @carlosgomez-gc2is
    @carlosgomez-gc2is 3 ปีที่แล้ว

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

  • @alemberhe5952
    @alemberhe5952 3 ปีที่แล้ว

    thank u very much short and clear

  • @DogWithABall
    @DogWithABall 4 ปีที่แล้ว

    should the time frame for the rater of market return be the same time frame for the risk free rate

  • @Weave.seen.this.b4
    @Weave.seen.this.b4 3 ปีที่แล้ว

    Thank you, this really helped

  • @eleanorfulani
    @eleanorfulani 4 ปีที่แล้ว +1

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

  • @imomjonkhamid4072
    @imomjonkhamid4072 3 ปีที่แล้ว

    well explained, thank u bro

  • @CleverTOOTH
    @CleverTOOTH 4 ปีที่แล้ว

    Thanks for the video :)

  • @mysteriousanalyst3598
    @mysteriousanalyst3598 10 หลายเดือนก่อน

    Can you apply CAPM on ETF’s not just individual stocks?

  • @gniginny197
    @gniginny197 5 ปีที่แล้ว +3

    Thanks! It's helpful!

  • @rakshithshetty9889
    @rakshithshetty9889 3 ปีที่แล้ว

    Thank you so much

  • @nikgreek3774
    @nikgreek3774 4 ปีที่แล้ว

    Good evening everyone,i am new at the investing almost 1 month that I study from youtube videos and some books that I bought.I know some things about P/E ratio and dividends and EPS but things like this I don't understand it,i have subscribed in the simple wall street website cause I think it gives you a lot of information about stocks.Can u suggest me how should I start and put everything in order? Sir I respect you a lot from your videos and an answer from you would really help me.Thank you and I wait for a little help

  • @eltajbabazade1189
    @eltajbabazade1189 4 ปีที่แล้ว +1

    Thank you !

  • @Everlasting33
    @Everlasting33 ปีที่แล้ว

    Thanks and appreciate

  • @kimie3001
    @kimie3001 5 หลายเดือนก่อน +1

    tq for the video

  • @nicholasdranfile9312
    @nicholasdranfile9312 2 ปีที่แล้ว

    I love your voice. also superb video explanation

  • @stranglesensei
    @stranglesensei 4 ปีที่แล้ว +1

    very helpful

  • @srirang.iyengar7005
    @srirang.iyengar7005 หลายเดือนก่อน

    thank you

  • @davidcisneros9214
    @davidcisneros9214 3 ปีที่แล้ว +3

    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
      @jessicawiley2814 2 ปีที่แล้ว

      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?

  • @beomkomap
    @beomkomap 3 ปีที่แล้ว

    super helpful sir!

  • @myblessingto
    @myblessingto 3 ปีที่แล้ว

    Thank u very much for good video clip.

    • @jessicawiley2814
      @jessicawiley2814 2 ปีที่แล้ว

      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??

  • @tinal4119
    @tinal4119 2 ปีที่แล้ว

    Great video!

    • @jessicawiley2814
      @jessicawiley2814 2 ปีที่แล้ว

      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?

  • @ArtHoward
    @ArtHoward 2 ปีที่แล้ว

    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
      @jessicawiley2814 2 ปีที่แล้ว

      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?

  • @Hayesville-Happy-Feet
    @Hayesville-Happy-Feet 4 ปีที่แล้ว +2

    Thanks for explaining Rf & Rm. I’ve been looking for a calculator that would calculate CAPM by just inputting the stock symbol. But using 3% & 9% for Rf & Rm make it easy since all investment sites give the beta of a stock.

    • @Potencyfunction
      @Potencyfunction 6 หลายเดือนก่อน

      🤣 Yu use calucator at that level of calcul ? 🤣 Are you coming from Paleonthogic era or mezozioc era ?

  • @alihamza-tt3uu
    @alihamza-tt3uu 3 ปีที่แล้ว

    Can somebody please tell how I can estimate and use historical data to calculate Rm ?

  • @jasminehelton7649
    @jasminehelton7649 2 ปีที่แล้ว

    Thank you so much! This was great.

    • @jessicawiley2814
      @jessicawiley2814 2 ปีที่แล้ว

      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?