JPMorgan's price-to-book and price, live
JPM — P/B Ratio, Current Price. Open JPM on the Ledge to see current values.
The price-to-book formula
P/B = Stock Price / Book Value Per Share
What a price-to-book below 1.0 means
P/B below 1.0 means the stock trades for less than its net assets. Like buying a house for less than the value of its parts. Buffett looks for this.
When price-to-book is useful, and when it isn't
P/B is most useful for asset-heavy industries (banks, insurance, REITs). It is less useful for tech companies where value comes from intangibles like software and brand.
Compare price-to-book across a bank and a tech firm
Look up JPM (a bank) and check its P/B ratio. Then look up MSFT (a tech company). Notice the huge difference and consider why.
Bargain or value trap? Question the asset values
What a bank at half its book value signals
A regional bank trades at P/B 0.5x (50 cents on the dollar of book equity). Your instinct?
Check your understanding
Sit with the ideas.
A bank stock has P/B of 0.8x. What does this mean?
Why:
Try this in paper trading
Identify the moat. Then size the position.
Pick a company. Articulate its moat in one sentence: switching costs, network effects, intangibles, cost advantage, or efficient scale. Paper-buy a position size proportional to your confidence in that moat surviving 10 years.
Open paper portfolio →Practice mode — simulated trades, not investment advice.