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).


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: