Originally Posted by
Baa_Baa
Interesting article thank you for posting it. It's intriguing that people seem to want to understand the 'market' when the only thing the 'market' provides is pricing. It is not necessary to 'understand' the market when it is plainly providing pricing every day, and is massively more complicated than understanding a company/business, and mostly irrelevant, like who cares why or what the the 'market' thinks, when what they think is collectively expressed in the price and is discoverable down to the minute.
To understand value though, focus should be on the business metrics. To join the two, the market will offer at times prices below or above value of the business, and very rarely equivalent to value, however you've measured it.
To be able to identify when the market is under or over-pricing a business is very simple, by how much is a bit more complicated as it brings into account timing, whereas valuing the business albeit difficult probably for many end-investors, is but an exercise well worth undertaking, to know whether the market price is under or over our valuation of the business.
I have no respect at all for the bogus theory of efficient market pricing, it is a myth, except for when it presents it's distortions and along with that, the opportunity to time acquisition or disposal of assets, that we already think we know the value of.