Thanks for the video. I find these models very vague however, in that they do not explain: are we talking about finding the cost of equity of a single stock or the expected return on of an entire portfolio? If I were a client advisor how would I use these models in real life, what would I need them for, in which occasion? Every video explaining such models gives us just the formula and nothing more nothing less. Additionally saying we are subtracting small cap portfolios performance minus large does not tell me much. Which stocks are we talking? How do we make the selection? Is it random? As the results can be very different from various selections. Precision is key when you are facing your client, you can't just talk theory. Same goes for HML value calculation and all the other factors added in Fama French 5 factor model, Cahart and so on. I guess what I am trying to say is what is the practical usefulness of these models today? Theory alone won't do. So I would challenge you to make a video where you give us a real case scenario from S&P 500 data for example, not some made up data please. Those I can find in the CFA books. Thank you.
Hi, Thanks for the explanation. I know this section, I am looking for, what is the use of portfolios that are available at kenneth R. French data library? could you please let me know?
@@RonaldMoy i mean, for regression, dv is single security excess returns, while ivs are fama french factors. So here dv can be a portfolio excess returns instead of a single security returns. Am i right?
Thanks for the video. I find these models very vague however, in that they do not explain: are we talking about finding the cost of equity of a single stock or the expected return on of an entire portfolio? If I were a client advisor how would I use these models in real life, what would I need them for, in which occasion? Every video explaining such models gives us just the formula and nothing more nothing less.
Additionally saying we are subtracting small cap portfolios performance minus large does not tell me much. Which stocks are we talking? How do we make the selection? Is it random? As the results can be very different from various selections. Precision is key when you are facing your client, you can't just talk theory. Same goes for HML value calculation and all the other factors added in Fama French 5 factor model, Cahart and so on. I guess what I am trying to say is what is the practical usefulness of these models today? Theory alone won't do.
So I would challenge you to make a video where you give us a real case scenario from S&P 500 data for example, not some made up data please. Those I can find in the CFA books. Thank you.
Hi,
Thanks for the explanation. I know this section, I am looking for, what is the use of portfolios that are available at kenneth R. French data library? could you please let me know?
You can use them to estimate Fama French models and other return regressions.
@@RonaldMoy it means, i can use a portfolio instead of one security to find the cost of equity?
@@sabaaslam4766 Not sure what you mean by that.
@@RonaldMoy i mean, for regression, dv is single security excess returns, while ivs are fama french factors. So here dv can be a portfolio excess returns instead of a single security returns. Am i right?