Relationship between ROE, PE,P/BV.



Well-Known Member
Getting the P/B Ratio right I think is a big challenge especially with so many huge mkt cap companies owning most of their wealth in intellectual property.
Back in the old days, a lot of the assets were in material form which are easily assess and normal rules of appreciation/depreciation apply.

Today for Eg. look at what FB is valued at, but if they went to liquidate it, does one think they'd even get half ?

Fate of yahoo, Nokia and even Sun Microsystems (I still feel sad for this deal) are some of the many examples bcos Tech companies form a large % of big mkt cap Co's
Even the 2008 bubble with realty values had a similar effect, the value which is evaluated isn't necessarily the value it'll get when liquidated.

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