Investment employers who are interested in statistcal valuation

Water Cooler Careers
#1

Hello!

I am enrolling from an insurance mathematician background. I have studied CFA Level 2.

The current valuation methods for stocks - as propagated by the CFA institute for instance - are in my eyes more like a valuation framework rather than an explanatory approach of stock value. The discounted cash flow approaches do not provide a concrete hint, how to calculate the future cash flow. Often pro forma income statements, which use a lot of static ralationships, are recommended to derive future cash flows. Basically you can simulate anything you want in a pro forma statement.

So I have developed a statistical valuation method, which calculates the equillibrium prices for stocks based on financial company figures (cash flow, income and balance sheet figures). And I have got another one to calculate the equillibrium prices of corporate bonds.

However a lot of investment employers do not seem to be impressed by my approach, I outlined in a short essay.

Are there investment employers, who are interested in statistical valuation?

Consuli

#2

If you walked into an interview for a legit insitutional asset mgmt company and start talking about how your forecast stock value with statistical analysis, your interviewers will (1) ding you immediately and (2) be laughing on the inside.

#3

I’d love it if you could expand on the methods you use.

But you need to understand that statistics may not be representitive of future results. Especially when the relationship is not statistically significant. This is why a fundamental approach based on current information proves more valuable than relying on past performance.