It is quite remarkable. We're so used to the stock being out of fashion, it's easy to forget that prices can do unusual things in the "up" direction too.


But it does seem to be a bit ahead of itself, no?

Crude and conservative:

Average P/B since the credit crunch just a hair under 1.38
Let's say 1.4 is pretty normal in the modern era.

We'll know end-2023 book tomorrow, but let's guess about $388000, or around $259 per B.

Let's say book grows at around 2.5%/quarter these days. That might equate to a guess of inflation + 7%/year value growth, plus 3.38%/year inflation. In the ballpark.

So, if things were boring and on trend, a series of expected prices might look vaguely like this:

When 2023-Q4 book comes out, book 259, price around 363 (tomorrow we'll know)
When 2024-Q1 book comes out, book 265, price around 372
When 2024-Q2 book comes out, book 272, price around 381
When 2024-Q3 book comes out, book 279, price around 390
When 2024-Q4 book comes out, book 286, price around 400

Needless to say, that takes us out till a year from now, yet today's price is already higher than that.

Fun while it lasts, but I'm not a buyer at these levels.

Jim