Message Font: Serif | Sans-Serif

No. of Recommendations: 1
The way I look at it is that the PIV gives an idea of the margin of safety, while the ER gives an idea of the return one could expect if the price suddenly reverted to its intrinsic value. In a way, they're two sides of the same coin, but giving different perspectives. To be sure, one will always go up as the other goes down. But while they're inversely related, it's not a simple proportional relationship where they move in opposite but equal directions (at least to my mathematically untrained eye). Here's a hypothetical scenario:
`CurrentPrice	IV	 PIV	 ER-----   ---     -----   -----150	100	150.0%	-33.3%140	100	140.0%	-28.6%130	100	130.0%	-23.1%120	100	120.0%	-16.7%110	100	110.0%	 -9.1%100	100	100.0%	  0.0%90	100	 90.0%	 11.1%80	100	 80.0%	 25.0%70	100	 70.0%	 42.9%60	100	 60.0%	 66.7%50	100	 50.0%	100.0%`

I think both serve a useful purpose.

Paul

### Announcements

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.