Musings on Markets

DECEMBER 10, 2023

Key Person(s): Pricing effects It is true that markets are pricing mechanisms, not instruments for reflecting value, at least in the short term, and it should come as no surprise then that the effects of a key person are captured in pricing premiums or discounts, sometime arbitrary, and sometimes based upon data.

Key Person Discount 128

Key Person Discount Start-ups Price to Book Marketability 128

Musings on Markets

JANUARY 26, 2025

In the next section, I look at stock returns for companies in different price to book deciles, in a simplistic assessment of the value premium. In my view, the small cap premium is not coming back, and given that it has been invisible for five decades now, the only explanation for why appraisers and analysts hold on to it is inertia.

Price to Book 76

Price to Book Start-ups Book Value Marketability 76

Musings on Markets

FEBRUARY 18, 2025

The first is that if markets are efficient, the price to book ratios will reflect the quality of these companies. In this example, for instance, business A, with a market value of equity of $150 million and a book value of equity of $60 million, will trade at 2.50 YouTube Video

Equity 52

Equity Book Value Marketability Start-ups 52