Good (Bad) Banks and Good (Bad) Investments: At the right price.
Musings on Markets
MAY 7, 2023
An investor who buys a good bank at too high a price, given its goodness, will underperform one who buys a bad bank at too low a price, given its badness. Consequently, you can only value the equity in a bank, and by extension, the only pricing multiples you can use to price banks are equity multiples (PE, Price to Book etc.).
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