Musings on Markets
JANUARY 19, 2022
The results are similar if you break stocks down based upon price to book ratios or revenue growth rates. Put simply, it does not require that you believe in any risk and return model in finance, since it is based on price and expected cash flows.
Musings on Markets
JANUARY 9, 2021
Consider, for instance, an investor who picks stocks based upon price to book ratios, who finds a stock trading at a price to book ratio of 1.5. The first is that I do not have a macro focus, and my interests in macro variables occur only in the context of corporate finance or valuation issues.
Musings on Markets
JANUARY 6, 2023
Check rules of thumb : Investing and corporate finance are full of rules of thumb, many of long standing. For example, I have seen it asserted that a stock that trades at less than book value is cheap or that a stock that trades at more than twenty times EBITDA is expensive. Standard deviation in stock price 2. Price to Book 3.
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