2 comments on “Confusing S&P Index Earnings Numbers

  1. Can I ask you to please review Eric Falkenstein’s recent book, Finding Alpha about how CAPM fails empirically? I feel like his idea is a fairly big one (that the lack of a relationship between market risk and return implies investors care about relative wealth, not total wealth). He also has a paper on SSRN which is a condensed version of the book: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1420356

  2. I’ll probably get around to that someday. Judging from his Overcoming Bias post on the subject, I’ll probably agree with most of his conclusions. His objections to CAPM seem clear enough that I don’t need a whole book to convince me.

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