Skip to main content
This Board Has Moved

This board has been migrated to our new platform! Check out the new home page at or click below to go directly to the new Board on the new site.

Go to the New Site
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
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).


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:

----- --- ------- ------
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)
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.