What’s Y-Factor?

March 11th, 2014

Investors require compensation for holding risk. In asset pricing models (such as the Capital Asset Pricing Model, or CAPM, or the Fama-French 3-Factor Model), a factor is a priced risk (i.e. the risk of being a small firm, or overall market risk) and is something investors require to be compensated to hold (as opposed to an upriced risk – say, the risk of a meteor wiping out Earth – which isn’t factored into a security’s price). Securities have exposure (also known as beta – β) to said risk. Thus, a security’s return is a function of the priced factors ( gamma – γ) and its exposure to each factor (beta – β). Sound like Greek to you? That’s okay, it is (well, at least the β and γ parts).

So, the Y-Factor is a collection of my ideas and musings. Exposure to the Y-Factor will vary – my family is very exposed, and a complete stranger will have zero exposure. Hopefully the Y-Factor is a priced factor; that my ideas and musings generate some value to my readers.

If you’re looking for exposure relating to economics, markets, equity research, or quantitative finance, check out Work Exposure.

If you’re looking for more personal exposure – projects I’m working on, family stuff, WordPress relating things, or anything other than work, check out Life Exposure.

If you’re looking for some of the things I’m doing with photography, check out the Photo Blog.

Finally, if all of the above sound interesting, then you’ll want Complete Exposure.

A Peek Behind the Y-Factor

Since the Y-Factor is an extension of me, you may be interested in who I am. I, Yash Patel, am a software engineer, re-trained in finance and economics at The University of Chicago, Graduate School of Business, and currently practicing the art of quantitative equity investment. To get a better idea, check out my resume.

I’m also a husband, father, brother, son, and much more. You can read about this in life exposure. I enjoy working on cars, and thanks to my project car (our 15-year old van), have many interesting projects to work on. I’m also dabbling in photography, which you can see here.

Legalese I should probably include…

Any postings or content by me on this site are my own opinions and views and don’t necessarily reflect the views, opinions, strategies, or investments of my current, or any former, employer. Any comments by other authors are strictly their own and, unless done so explicitly, aren’t endorsed by me.

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