Musings on Markets: The Pricing Game

This article examines how publicly traded companies are priced across global markets in early 2019, distinguishing between intrinsic value (determined by cash flows, growth, and risk) and market price (determined by supply, demand, and momentum). The author presents five key propositions about pricing: absolute rules fail in relative markets, global markets share similar distributional characteristics despite level differences, book value is overrated, fundamentals largely explain pricing multiples, and markets price what is actually valued rather than what should be valued.