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Sorry, I had a son asking me how to sell Pokemon cards on eBay while I was posting that. Here's a better format (and now he's asking if I can hang a real basketball hoop in his room. Sheesh).

Zee,

The discrepancy arises from the fact that it's an average of numbers and the averages don't fit the same calculation as each individual component. For example, say your portfolio had stocks with the following prices, intrinsic values and PIV-ER's:
`Price   IV      PIV        ER-----   ---    -------   ------100	100    100.00%	  0.00%90	100	90.00%	 11.10%80	100	80.00%	 25.00%70	100	70.00%	 42.90%60	100	60.00%	 66.70%50	100	50.00%	100.00%                ------  -------Average	(Mean)	75.00%	 40.95%  (add each column and divide by number of stocks)`

But if you use the formula (1-PIV)/PIV, then (1-.75)/.75 = 33%

I'm sure there's some technical mathematical explanation, but this is how it works. Of course, we should also probably look at the weighted average of our portfolio (larger holdings count for more).

Paul (who wondered the same thing when I looked at my own portfolio)