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Dark Accounting Matter

Harvard Corporate Governance

The S&P 500 currently trades at a price to book value of 4.2, suggesting that book value accounts for less than 20% of the S&P 500’s market value. The remaining 80%, appears nowhere in these firms’ balance sheets—it is invisible to contemporary accounting techniques and constitutes “dark accounting matter.”

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A Follow up on Inflation: The Disparate Effects on Company Values!

Musings on Markets

Historical Data: 1930-2019 To see how this framework works in practice, let's start by looking at the performance of US stocks, across the decades, and look at the returns on stocks, broadly categorized based on market capitalization and price to book ratios.

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Japan Megabanks’ Strategic Share Sale Marks Big Priority Shift

Global Finance

With the Japanese economy sluggish, Wu points out, the TSE has become concerned about the low price-to-book ratios of its listed companies, including banks; half of Prime members traded below book last year.

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Analyzing MetLife Stock: Is Buy Strategy the Right Move?

Benzinga

Valuation Price-to-book (P/B) is one of the multiples used for valuing insurance stocks. The consensus mark for 2025 earnings is pegged at $9.83 per share, suggesting an improvement of 13.4% from the 2024 estimate. The same for revenues is $76.5 billion, hinting at a 4.6% increase from the 2024 estimate.

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The Importance of (and challenges with) Valuing Intangibles

IVSC

Searching for stocks with low price-to-book ratios was a good indication of a potential bargain. This makes the task of valuation much more difficult, but also a lot more interesting. In the past, market valuations often mirrored the reported balance sheet.

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Data Update 3: Inflation and its Ripple Effects!

Musings on Markets

I also looked at how inflation plays out on equity sub-groupings, on two dimensions, the first being market capitalization and the second being price to book, with the former becoming a stand-in for the vaunted small cap premium and the latter for the value versus growth question.

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Market Resilience or Investors In Denial? A Mid-year Assessment for 2023!

Musings on Markets

trillion in the first six months of 2023, 97.2% trillion increase in value for all US equities. Looking at value and growth go back and forth between the winning and losing columns in 2023, I believe that this is a pattern that will continue to play out for the rest of the decade, with no decisive winner.