In the 1980s, Kaplan established the value evaluation process in his book Valuation: Measuring and Managing the Value of Companies.
Unfortunately, the industry's sole mega-deal, Mexico's Compartamos IPO, with its 13-times book valuation, probably hasn't helped, as it's given some MFI owners a somewhat inflated sense of their own stock's worth.
For example, a small or midsize company with a low price-to-earnings and price-to-book valuation would be likely to be rated according to a style developed by Robert Hagstrom, a value manager and author of "The Warren Buffett Way".
It's not yet clear exactly what Watsa sees in BlackBerry, but with a cheap price-to-book valuation of 0.48 times — 1 times price-to-book is usually considered fair value — and near $9 stock price, he may think his margin of safety is high, Johnson said.
But to be any more precise would violate this column's fairly strict prohibition on calling the market.*As well as reading the book, see "Valuation Ratios and the Long-Run Stock Market Outlook: An Update", by John Campbell and Robert Shiller.
House prices are based on sales recorded by the Land Registry and Registers of Scotland plus Red Book mortgage valuation - where a surveyor has valued a property for the purpose of mortgage lending.
"In my view it is extremely dangerous buying a high-tech company based on a multiple, which might be hiding more than it is revealing," says Aswath Damodaran, professor of finance at the Stern School of Business at New York University, and author of several books on "valuation principles".
Given publishing timetables, whether Robert Shiller and Andrew Smithers/Stephen Wright were brilliant or just lucky in bringing out their books on excessive valuations around the market peak in 2000 is hard to tell.But it is intriguing, and frustrating, to see the old arguments being trotted out again.
Customers selling their property can book a free valuation from one of these experts and for a fixed VAT inclusive fee of £599, the service includes the full listing you would normally get from an estate agent which is distributed to the major platforms of Rightmove, Zoopla and Prime Location.
That suggests a valuation above book value.
