Contraction in multiples unjustified!
First graph - 15 X jump in Book Value since 2005 ; only 4 x jump in stock price; critics will say and rightfully so that P/B has contracted due primarily to the fact that multiples have compressed significantly
Second graph - Last 4 years BV up 1.6 x and stock has been up 1.1 x ; I think the catch up trade will happen as and when RBI starts easing liquidity again - taking a 3 year view, this is bound to happen!
First graph - 15 X jump in Book Value since 2005 ; only 4 x jump in stock price; critics will say and rightfully so that P/B has contracted due primarily to the fact that multiples have compressed significantly
Second graph - Last 4 years BV up 1.6 x and stock has been up 1.1 x ; I think the catch up trade will happen as and when RBI starts easing liquidity again - taking a 3 year view, this is bound to happen!
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