January 2019 Data Update 9: The Pricing Game | Value Investing News

January 2019 Data Update 9: The Pricing Game

  • The essence of pricing is attaching a number to an asset or company, based upon how similar assets and companies are being priced in the market.
  • My point is not that that you cannot have rules of thumb, since they do exist for a reason, but that those rules, in a pricing world, have to be scaled to the data.
  • That is probably true, but fundamentals do have significant explanatory power, when it comes to why some companies trade at low multiples of earnings or book value and others are high multiples.
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