Pricing market risk into model

When accounting for market risk (eg. unknown / potentially limited TAM), any thoughts on how to best "price" it or bake it into the operating financial model?

One approach would be to look at top line growth assumptions, sanity check it by looking at the implied market share, and calibrate growth accordingly.

Was wondering if any other sophisticated, practical, and real world approaches out there.

 

carter1588, sorry about the lack of response. Maybe one of these topics will help:

  • Off The Beaten Path: Commercial Banking to Private Equity (The Non-Traditional Route) traditional routes and also helps you feel comfortable with tough LBO modeling tests. 3) Network. I don't ... want. Case in point, my current role requires absolutely no modeling to succeed, but the bare minimum ... skill for any analyst/associate role at a private equity firm is good modeling skills. To offset my ...
  • The route to investment banking for an Accounting Major internship/1st year at a BIG 4 firm, this is one of the best ways to go if you want to break into IB / PE / HF in ... the future. PwC- Deals: Helping our clients get the best deals done at the appropriate price ... , negotiating terms with leverage and control, reducing risk and enabling smooth post-deal integration. * Due ...
  • Alternative route to Hedge Fund? Hey guys, I'm curious about the possible paths taken to get into a Hedge Fund. I understand ... that some of the common paths include IBD> HF or ER> HF or sales> HF. Depending on how my ... I'm not sure if I actually want to do IBD, as my interests lie in the markets. You may then suggest ...
  • Interview Question: Make A Market on Anything adjusting your market for risk due to uncertainty. Last Price Traded This is the going market price ... his faith in the market with his faith in his models. Interviewers don't usually give you the ... price. If you have accumulated a serious position you would want to make your markets asymmetric to make ...
  • Career Path to become a Real Estate Developer Is there any way I can jump into real estate development with my civil engineering background and ... path to take to get into real estate development or to get accepted into an MBA/MSRED program? As far ... I should take? I most likely would enjoy any of the possible paths. How To Get Into Real Estate Development ...
  • Oil Prices- Whats Behind The Drop? the world who collectively decide how much oil to pump into the market. The drop in oil prices was ... hardest by the price drop and I personally see this trend carrying on well into the new year. At a meeting ... would not be able to sustain themselves at current prices. Their decision to carry down this route for ...
  • Why Would Anyone Go Into Consulting? MBB offer and a few in banking, I have to ask: why would you go into consulting? As a junior, you get ... paid way less and travel an arcane amount The hours at the office I received an offer at is also known ... seemed extremely risk averse. The guys in banking though seemed much more like heavy hitters that were ...
  • How to View The World... or Which Way is the Right Way to Think successes. Far from it. Growth, both personally and professionally, is cultivated from both inquisition into ... always wandering down a path, and we will always come to the roads diverging in the woods, but our ... mentality is how we chose which path to take. Among the things on my mind, I cannot help but dwell on ...
  • More suggestions...

Or maybe the following users have something to say: Anopportunist sfreihse rp1990

I hope those threads give you a bit more insight.

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

Ut voluptate qui possimus id voluptatem consequatur. A magnam voluptatem ad pariatur praesentium. Inventore odit aspernatur vero autem dolor. Est rem reprehenderit corrupti accusamus aperiam. Est aut quaerat ut rerum quam et commodi. Corrupti aut iure quia nobis alias aut nihil.

Career Advancement Opportunities

April 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 99.0%
  • Warburg Pincus 98.4%
  • KKR (Kohlberg Kravis Roberts) 97.9%
  • Bain Capital 97.4%

Overall Employee Satisfaction

April 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 98.9%
  • KKR (Kohlberg Kravis Roberts) 98.4%
  • Ardian 97.9%
  • Bain Capital 97.4%

Professional Growth Opportunities

April 2024 Private Equity

  • The Riverside Company 99.5%
  • Bain Capital 99.0%
  • Blackstone Group 98.4%
  • Warburg Pincus 97.9%
  • Starwood Capital Group 97.4%

Total Avg Compensation

April 2024 Private Equity

  • Principal (9) $653
  • Director/MD (22) $569
  • Vice President (92) $362
  • 3rd+ Year Associate (91) $281
  • 2nd Year Associate (206) $266
  • 1st Year Associate (387) $229
  • 3rd+ Year Analyst (29) $154
  • 2nd Year Analyst (83) $134
  • 1st Year Analyst (246) $122
  • Intern/Summer Associate (32) $82
  • Intern/Summer Analyst (314) $59
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
kanon's picture
kanon
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
GameTheory's picture
GameTheory
98.9
9
numi's picture
numi
98.8
10
Kenny_Powers_CFA's picture
Kenny_Powers_CFA
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”