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Price/book is a good metric for picking stocks.  As you said, it puts a floor under what your stock can fall to as they could declare bankruptcy and sell off the assets if things get really bad.  You should realize however that using Price/book will keep you out of some market segments by definition.  One of these segments would be software companies.  A company like Microsoft has a high price/book ratio since most of their products are intellectual property, (software), put on cheap pieces of plastic, (CDs, DVDs), made with relatively inexpensive machinery, (a CD stamper can process hundreds of CDs or more a day, meaning each CD costs pennies to produce).  This lack of machinery and infrastructure will cause them to have a high price/book ratio.  This is not a knock on your strategy, it is just an observation that you should be aware of.  I am not an expert, so you can make of this post what you will.  Good luck in your investing.  May all your choices be winners.


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