Episode 6 - Stock Valuation: Understanding Book Value for Beginners Get That Bread - A Value Investing Podcast

Episode 6 - Stock Valuation: Stock Valuation: Understanding Book Value for Beginners


A Video Version of this episode: http://bit.ly/2C4xqHP


1) Book value IS NOT market value!!! Book value, or equity, is an accounting construct that at times diverges from economic reality. (So just because a company is trading below book value doesn't mean it's necessarily cheap; and vice versa, not all stocks trading above 1x book value are expensive).


2) Here's the computation for P/B:
(method 1) = Market capitalization / equity
(method 2) = price per share / book value per share.


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