Our Models

The Equity Risk Premium (ERP)

Market-implied compensation for equity risk, updated daily using observable data and forward-looking expectations

Read the White Paper

A man wearing glasses and a blazer working at a desk, writing in a notebook beside a computer monitor in a modern office.

What it is

What is this model?

The Equity Risk Premium framework infers the compensation investors require for holding equities over risk-free assets by solving a multi-stage valuation identity that links observed market prices to forward-looking cash flow and growth assumptions.

The model builds on the conceptual foundations developed by Prof. Aswath Damodaran, refined to support a more responsive, data-rich implementation.

What the model does

Calculates a market-implied cost of equity by solving a present-value identity with forward-looking earnings and payout inputs.

Derives the ERP as the spread between the implied equity return and the 10-year U.S. Treasury yield.

Anchors growth and payout assumptions in observable expectations across multiple horizons.

What it is

What is this model?

The model builds on the conceptual foundations developed by Prof. Aswath Damodaran, refined to support a more responsive, data-rich implementation.

What the model does

Calculates a market-implied cost of equity by solving a present-value identity with forward-looking earnings and payout inputs.

Derives the ERP as the spread between the implied equity return and the 10-year U.S. Treasury yield.

Anchors growth and payout assumptions in observable expectations across multiple horizons.

a group of people sitting around a table with laptops

The model measures the implied reward for owning equities versus 10-year Treasuries. It helps assess whether equity risk is being priced generously or tightly over time.

Why It’s Relevant

Why regime awareness changes risk perception

Structural regime shifts frequently emerge before volatility-based signals become informative.

Beyond Volatility

Identifies regime shifts driven by distributional change, not volatility or moment-based signals.

Earlier Regime Insight

Detects subtle structural transitions that often emerge before traditional risk indicators react.

Governance-Ready Classification

Provides interpretable, auditable regime labels suitable for disciplined risk and oversight frameworks.

Market Insights

Independent macro, market signals, and tactical perspectives

Selected research notes on macro regimes, risk dynamics, and portfolio implications across market cycles.

Financial

Jul 7, 2026

Federico Polese

The Datacentre Buildout

Which investment cases are still open

Financial

Jul 2, 2026

Federico Polese

India Didn't Have a Small Cap Bubble. It Had a Fragility Problem.

Flagship post, India series. Reading time about seven minutes.

Financial

Jul 1, 2026

Federico Polese

The Jet Fuel Panic Was Overblown

How a $100 crack spread revealed which airlines hedge kerosene and which hedge hope

Read our newsletters

Get in Touch

Partner with experts who understand your needs and those of your customers

Let’s discuss how our actionable solutions can help you plan smarter, grow stronger, and achieve lasting success.

Get started