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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Graham Osborn who wrote (61741)	2/20/2019 3:40:16 PM
From: Paul Senior	1 Recommendation Recommended By sjemmeri Respond to of 78717

Those p/tbv numbers need context imo. I see the argument that margin-of-safety exists, or possibly exists, when p/tbv is less than 1x. But it's not obvious (to me anyway) what to make of the numbers by just looking at a company's p/tbv at 5x or 7x. Those numbers by themselves, tell me nothing. I provide context thus: FB p/tbv, 7x, is currently somewhat less than nine-year p/tbv median average(9.4x). GOOG p/tbv (5x) is currently slightly less than 10-year p/tbv median average(5.3). Ergo, FB and GOOG(L) are somewhat undervalued imo if based historically on p/tbv. For several years I have posted here my estimate of what fair value GOOG might be trading at during the year. My calculation this year, again based on margins, is that GOOG should/could/might have a fair value and trade at 1200, just somewhat above current level. As I somewhat rely on this for buy decision, I wouldn't now add to my GOOG position with stock at 1115, but I don't expect I'll be selling now either.