What’s Your Value?

June 11, 2006

I use a definition of stock valuation which may not be new (I doubt it is), but it does seem to be little known or overlooked. To dive right into it, it says:

Valuation = time needed for future Earnings to add up to
                [ Price - {(tangible) Book value} ]

While not perfect, it's a first step in assembling the relevant pieces in an attempt to unify and improve upon the usual valuation ratios.

The motivation behind this is not difficult and can be found here:

value.ps (PostScript file),

or here:

value.pdf (PDF file).

—-

"I'm lookin' for one new value … but nothin' comes my way"

Iggy Pop, New Values, (1979).

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