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Strategies & Market Trends : Value Investing
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To: Graham Osborn who wrote (55404)6/3/2015 5:45:23 PM
From: Paul Senior  Read Replies (1) of 78670
 
I don't use the Graham number, but I do use book value.

For BV I think you just have to choose a conservative multiple based on historic norms for that subindustry.

I use historical bv for the company itself, and I almost never compare a company's p/bv to what its peers are doing (i.e. the peer average).

Seeking Alpha guys particularly annoy me when they write-up a company and say it's undervalued because other companies in its sector trade at a higher p/bk or a higher p/e. As if by that analogy, that stock with a p/e of 50:1 or 7xbv is cheap and therefore buyable, because a peer company trades at 75 times earnings and 10 times book.
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