“Asset prices should equal expected discounted cashflows. Forty years ago, Eugene Fama (1970) argued that the expected part, ‘testing market efficiency,’ provided the framework for organizing asset-pricing research in that era. I argue that the ‘discounted’ part better organizes our research today.” “I start with facts: how discount rates vary over time and across assets. […]“Asset prices should equal expected discounted cashflows. Forty years ago, Eugene Fama (1970) argued that the expected part, ‘testing market efficiency,’ provided the framework for organizing asset-pricing research in that era. I argue that the ‘discounted’ part better organizes our research today.” “I start with facts: how discount rates vary over time and across assets.Read MoreDrivers of Value, Economics, Equity Investments, Fixed Income, Performance Measurement & Evaluation, Portfolio Management, Risk Management, bonds, investing, Investment Management Strategies, Investment Products and Asset Classes, John H. Cochrane, risk management
