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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (62557)9/25/2019 7:12:55 AM
From: Spekulatius1 Recommendation

Recommended By
Jurgis Bekepuris

  Read Replies (3) of 78669
 
Re GN - why do you think the Graham Numbers adds value (in terms of a valuation metric) when it contains the book value as a multiplier which by itself has been found to be mostly worthless (outside banking and insurance) for the most part? Its more like a theoretical related not related to VFF. I can see why one used LE or EV/EBIT or even EV/ EBITDA as valuation heuristics, but if you multiply something with a numbers that had been found to be worthless, then the result will most likely worthless too.

I used to look at book value, but outside of Insurance or banks, I think this number is worthless. Or do you use it as an heuristic for replacement value? It can be , but in most cases it’s a pretty lousy one.
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