| | | OT
"Value investing is concerned with valuation, and you need a stock price to get a valuation." Well, I wonder if that's the crux of the matter.
The way I see it, a company's stock price is the ongoing result of the outcome between a buyer and a seller at any moment on a stock exchange. For a company wanting to enter the public arena of a stock exchange, a price is put forward at the IPO stage. Once that stock is issued "the price fight" begins. And from that price, plus number of shares, one sees the Market Capitalization of the company.
This price aspect is probably more what that sometimes "paranoid" Mr. Market is all about, as we sometimes see major gyrations in the "price" of a stock, even though the Asset Value of the company hasn't really changed.
Isn't value more about what the total Assets of a company are worth ? And isn't that more in line with that Book Value that Value Investors strive to calculate ? And isn't that 'Book Value' more about the Liquidated Value of a company because that's possibly the only time that a shareholder can obtain a financial benefit from that Book Value, as the Assets of the company are Liquidated and distributed among the shareholders ?
I suggest that was the central theme of Ben Graham's "Value Investing" strategy ..... "buy something for 50c that (its Assets) was worth $1".
It's probably also why his most famous student, Warren Buffett, has been known to declare that he wouldn't be concerned if the stock market (i.e. where "stock prices" are determined) remained closed for a year or more.
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