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Paul, Dean -

Good catch. I recently amended my PIV-ER formula. I no longer use book value, as it includes intangibles and other non-operating assets that can make a decent business more attractive than is warranted. Now I just use cash and debt. So after estimating a firm's operating value, I add cash and then subtract debt.

The reason for using cash and debt vs. book value is to make PIV-ER more restrictive. I have so many companies to study, so I need to weed out the marginal prospects in my first 10-15 minutes of work.

I will miss some great stocks, including perhaps SNDK. Under the cash/debt approach, a company like SNDK that has lots of book value ($22 per share) is somewhat penalized. But as you may recall from my book, "one pearl is better than a whole necklace of potatoes." I want pearls.

Try re-running your numbers with $1.84 billion of cash and $1.23 billion of debt and let me know what you get. You may decide to keep book value, which I admit is more accommodating than my cash/debt approach.

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