CAPM - What is the Capital Asset Pricing Model

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  • Опубликовано: 23 сен 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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Комментарии • 283

  • @edit_manger
    @edit_manger 3 года назад +509

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

    • @ozandogacerdem8450
      @ozandogacerdem8450 3 года назад +16

      This comment represents me also.

    • @lbrandaovieira5
      @lbrandaovieira5 3 года назад +5

      Outstanding, isn't it?

    • @menzoznem
      @menzoznem 3 года назад +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 года назад

      I to

    • @melissatresler5903
      @melissatresler5903 3 года назад

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

  • @dianesullivan5338
    @dianesullivan5338 Месяц назад +454

    To my understanding this just proves how much we need an edge as investors because playing the market like everyone else just isn’t good enough. I've been quite unsure about investing in this current market and at the same time I feel it's the best time to get started on the market, what are your thoughts?

    • @HildaBennet
      @HildaBennet Месяц назад +2

      Since the crash, I've been in the red. I’m playing the long term game, so I'm not too worried but Jim Cramer mentioned there are still a lot of great opportunities, though stocks has been down a lot. I also heard news of a guy that made $250k from about $110k since the crash and I would really look to know how to go about this.

    • @PennyBergeron-os4ch
      @PennyBergeron-os4ch Месяц назад +1

      There are actually a lot of ways to make high yields in a crisis, but such trades are best done under the supervision of Financial advisor. I've been getting assisted by a FA for almost a year now, I started out with less than $200K and I'm just $19,000 short of half a million in profit.

    • @JosephineKenney
      @JosephineKenney Месяц назад +1

      Impressive can you share more info?

    • @PennyBergeron-os4ch
      @PennyBergeron-os4ch Месяц назад +1

      Sharon Lee Peoples is my licensed manager. Search the name. and you’d find necessary details to work with to set up an appointment.

    • @JosephineKenney
      @JosephineKenney Месяц назад

      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.

  • @htoolay6581
    @htoolay6581 4 года назад +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 RUclips as well.

    • @LAinLA86
      @LAinLA86 Год назад +1

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

    • @Potencyfunction
      @Potencyfunction 5 месяцев назад

      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.

  • @Richard-q1
    @Richard-q1 3 дня назад +152

    Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

    • @julie-e3t
      @julie-e3t 3 дня назад

      Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks

    • @Richard-q1
      @Richard-q1 3 дня назад

      @@julie-e3t However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments

    • @julie-e3t
      @julie-e3t 3 дня назад

      @@Richard-q1 Oh please I’d love that. Thanks!

    • @Richard-q1
      @Richard-q1 3 дня назад

      @@julie-e3t Clementina Abate Russo is her name

    • @Richard-q1
      @Richard-q1 3 дня назад

      Lookup with her name on the webpage.

  • @lissiemackintosh
    @lissiemackintosh 3 года назад +34

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

    • @jessicawiley2814
      @jessicawiley2814 2 года назад +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??

  • @dendyindramawan6450
    @dendyindramawan6450 4 года назад +10

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

  • @kristiecarbaugh117
    @kristiecarbaugh117 3 года назад +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!!

  • @everything_is_on_fire3155
    @everything_is_on_fire3155 4 года назад +5

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

  • @achozenshaman
    @achozenshaman 2 года назад +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 года назад

      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?

  • @waseemahmed2567
    @waseemahmed2567 2 года назад +1

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

  • @WallStreetUniversity
    @WallStreetUniversity Год назад +1

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

  • @keithjoshuamassi9785
    @keithjoshuamassi9785 5 лет назад +8

    So easy to understand. Thanks

  • @hibadebbar4617
    @hibadebbar4617 3 года назад +2

    Your work is still paying off !!! Thank you

  • @wafaaahmed9939
    @wafaaahmed9939 4 года назад +2

    I appreciate the clear and easy explanation.

  • @oliviazuniga4677
    @oliviazuniga4677 2 года назад +1

    Loved the quick and easy explanation. Graphics are awesome

  • @Rajeshkumar-li2dn
    @Rajeshkumar-li2dn 4 года назад +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 ❤❤❤

  • @rinkiarora2808
    @rinkiarora2808 3 года назад

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

  • @classone9001
    @classone9001 2 года назад +1

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

  • @Leandrasjones
    @Leandrasjones 3 года назад +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.

  • @mike55mike55mike
    @mike55mike55mike 5 лет назад +16

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

  • @joshuafancher3111
    @joshuafancher3111 5 лет назад +8

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

  • @johnzarznia6814
    @johnzarznia6814 5 лет назад +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!

  • @gigglinghazker
    @gigglinghazker 8 месяцев назад

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

  • @abhimanyujaiswal2096
    @abhimanyujaiswal2096 3 года назад +2

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

  • @bamschilders
    @bamschilders 4 года назад +4

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

  • @buhle6407
    @buhle6407 5 лет назад +5

    Perfect!!. Thank you

  • @Omnomtoto
    @Omnomtoto 2 года назад

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

  • @afhoadpfhafpaiofhap
    @afhoadpfhafpaiofhap 3 года назад +1

    So well explained. love the videos.

  • @JakeDoesMusicSometimes
    @JakeDoesMusicSometimes 2 года назад

    This is an extremely well done video geez thank you

  • @lldbaby
    @lldbaby 3 года назад

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

  • @samuelchong4085
    @samuelchong4085 Год назад +1

    Thank you for the detailed explanation!

  • @BOWHKARMA3
    @BOWHKARMA3 5 лет назад +3

    very useful, thanks a lot.

  • @ghaubold35
    @ghaubold35 5 лет назад +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.

  • @raghadfinance2960
    @raghadfinance2960 5 лет назад +1

    Very helpful, thanks!

  • @mkingers1
    @mkingers1 5 лет назад +4

    Perfectly explained thank you!

  • @tinnguyen2219
    @tinnguyen2219 5 лет назад +9

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

  • @duasanam9150
    @duasanam9150 4 года назад

    So nicely explained

  • @semboersen2632
    @semboersen2632 3 года назад +1

    The MVP himself. Thank you so much!

  • @andyhedges4713
    @andyhedges4713 4 года назад +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. 👍👍👍

  • @rifatbaranayarci4115
    @rifatbaranayarci4115 4 года назад +1

    Only helpful and useful stuff. Thank you!!

  • @196nagahori9
    @196nagahori9 4 года назад +1

    Thank you for this great content!
    Love from japan

  • @moregoldmoresunshine1987
    @moregoldmoresunshine1987 5 месяцев назад +1

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

  • @chlarissamaeurbi5957
    @chlarissamaeurbi5957 3 года назад

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

  • @danbolord6059
    @danbolord6059 5 лет назад +4

    Great material :)

  • @kakitlau9124
    @kakitlau9124 4 месяца назад

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

  • @sidrahbilal3877
    @sidrahbilal3877 Год назад

    Sir, that was the best explanation, period!

  • @SurajP16
    @SurajP16 11 месяцев назад

    thanks, it was really helpful

  • @anthonyjovceski
    @anthonyjovceski 3 года назад

    Great explanation!

  • @internetdigitalentrepreneu1235
    @internetdigitalentrepreneu1235 2 года назад

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

    • @jessicawiley2814
      @jessicawiley2814 2 года назад

      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?

  • @gauravmohan9271
    @gauravmohan9271 Год назад

    Thanks..very informative

  • @gniginny197
    @gniginny197 5 лет назад +3

    Thanks! It's helpful!

  • @willfindjr
    @willfindjr 3 года назад

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

    • @jessicawiley2814
      @jessicawiley2814 2 года назад

      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??

  • @CleverTOOTH
    @CleverTOOTH 4 года назад

    Thanks for the video :)

  • @Weave.seen.this.b4
    @Weave.seen.this.b4 2 года назад

    Thank you, this really helped

  • @gatraaaaa99
    @gatraaaaa99 4 года назад +1

    got it, thanks!

  • @alemberhe5952
    @alemberhe5952 3 года назад

    thank u very much short and clear

  • @JosueLopez-jx1th
    @JosueLopez-jx1th 2 года назад

    Wonderful explanation ! Thanks !

    • @jessicawiley2814
      @jessicawiley2814 2 года назад

      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 года назад +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. :)

  • @HurricaneTrist
    @HurricaneTrist 2 года назад +1

    Thanks! Taking my Series 66 tomorrrow

  • @davidharte9616
    @davidharte9616 5 лет назад +68

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

    • @LearntoInvest
      @LearntoInvest  5 лет назад +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 года назад +1

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

  • @eltajbabazade1189
    @eltajbabazade1189 4 года назад +1

    Thank you !

  • @imomjonkhamid4072
    @imomjonkhamid4072 3 года назад

    well explained, thank u bro

  • @ramiro4533
    @ramiro4533 4 года назад

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

  • @danielvillela7272
    @danielvillela7272 4 года назад

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

  • @stranglesensei
    @stranglesensei 4 года назад +1

    very helpful

  • @beomkomap
    @beomkomap 3 года назад

    super helpful sir!

  • @justinrrizzo
    @justinrrizzo 4 года назад +10

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

  • @rakshithshetty9889
    @rakshithshetty9889 3 года назад

    Thank you so much

  • @timothydavis3754
    @timothydavis3754 5 лет назад +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!

  • @Everlasting33
    @Everlasting33 Год назад

    Thanks and appreciate

  • @samiacampbell1792
    @samiacampbell1792 5 лет назад +6

    Thank you! All the other videos on this are confusing

    • @aleras574
      @aleras574 5 лет назад +1

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

    • @LearntoInvest
      @LearntoInvest  5 лет назад +4

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

  • @srirang.iyengar7005
    @srirang.iyengar7005 Месяц назад

    thank you

  • @TheSutianneli
    @TheSutianneli 4 года назад +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..

  • @jasminehelton7649
    @jasminehelton7649 2 года назад

    Thank you so much! This was great.

    • @jessicawiley2814
      @jessicawiley2814 2 года назад

      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
    @davidcisneros9214 3 года назад +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 года назад

      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?

  • @kimie3001
    @kimie3001 5 месяцев назад +1

    tq for the video

  • @tinal4119
    @tinal4119 2 года назад

    Great video!

    • @jessicawiley2814
      @jessicawiley2814 2 года назад

      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?

  • @G1Martins
    @G1Martins 3 года назад

    Banger!

  • @walterconn5637
    @walterconn5637 3 года назад

    Thanks!

  • @reemeaq1371
    @reemeaq1371 9 месяцев назад

    Helpful 😍

  • @tubarao1143
    @tubarao1143 4 года назад

    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?

  • @Hayesville-Happy-Feet
    @Hayesville-Happy-Feet 4 года назад +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 месяцев назад

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

  • @albinwiklund4557
    @albinwiklund4557 4 года назад

    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?

  • @harryallenpearce89
    @harryallenpearce89 3 года назад

    Thank you

  • @Ylxx1933
    @Ylxx1933 4 года назад +2

    great!

  • @ericdelvalle2056
    @ericdelvalle2056 3 года назад

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

  • @mohamuudahmed4898
    @mohamuudahmed4898 2 года назад

    thanks alot

  • @rjamesify
    @rjamesify 2 года назад +1

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

  • @visheshgoyal3999
    @visheshgoyal3999 3 года назад +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 года назад

      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 года назад

      @@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

  • @loyaranha
    @loyaranha 4 года назад +2

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

    • @MrMineHeads.
      @MrMineHeads. 3 года назад +1

      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
      @jessicawiley2814 2 года назад

      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??

  • @aWildJersh
    @aWildJersh 3 месяца назад

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

  • @slopsloppier5569
    @slopsloppier5569 4 года назад +3

    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
      @CleverTOOTH 4 года назад +2

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

  • @carlosgomez-gc2is
    @carlosgomez-gc2is 3 года назад

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

  • @myblessingto
    @myblessingto 3 года назад

    Thank u very much for good video clip.

    • @jessicawiley2814
      @jessicawiley2814 2 года назад

      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??

  • @DavidFriedberg123
    @DavidFriedberg123 5 месяцев назад +1

    Damn, this was good🤩

  • @andreaivanna2185
    @andreaivanna2185 3 года назад

    thank you!!

    • @jessicawiley2814
      @jessicawiley2814 2 года назад

      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?

  • @stephf4175
    @stephf4175 4 месяца назад

    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.

  • @Samborondon11
    @Samborondon11 2 года назад

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

  • @aakashtiwari2472
    @aakashtiwari2472 5 лет назад +5

    Short and crisp!

  • @ArtHoward
    @ArtHoward 2 года назад

    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 года назад

      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?