No. of Recommendations: 3
<<There is, as you note, no theoretical reason that this must be so, and good reasons to believe that the two should diverge over time--they just haven't yet. So far, "about 1.5 times book" has almost exactly the same meaning in terms of valuation level as it has for many many years, at least well within the margin of error that it always had. >>
Here’s part of that elusive “reason” lol… the rise in cash which is now well over $300 Billion. Thats $300 Billion, approaching 1/3 of the company, that should be carried at 1.00 X. Yes, that’s a depressant on the multiples one should apply to overall BV. A higher multiple demands putting a chunk of that 1.0x book cash to work.