‘Quantitative Failure’

Ok, so I’m not going to tell you any stories or make any movie references on this one. Sorry. I’ve got a New York Strip waiting on me uptown. Wait, I guess that was a mini-story. Damn.

Links

1997 paper from Michael Mauboussin: “Thoughts on Valuation” [H/T @BrattleStCap] (LINK)This underscores the important point that P/E multiples are not a determinant of value, but rather a function of value. On Wall Street, the typical valuation formula is EPS x P/E = value.

Breaking The American Consumer

That is a key plot point in the movie Wall Street, one of my favorite flicks. But it doesn’t really tell you very much about anything. Does the Young Turk go on to great success? Does he flame out spectacularly? Does he learn his idol is a sham or the greatest investor of all time?