“Should I keep holding?” What to watch to stay grounded in a market plunge (Kwak Sang-jun, Part 2 | Money Focus)
An independent exercise, not a statement by the video creator or verification of every claim in the video.
Can a share price fall while book value rises?
Suppose a company has book value per share of 100 and trades at 1.5 times book, giving a share price of 150. Even if retained earnings lift book value per share to 120, a drop in the market multiple to 1 times book would put the price at 120, down 20%. Keeping the price at 150 would require a multiple of at least 1.25 on the new book value of 120. Projecting 20% book-value growth alone therefore does not establish price support; also assess how far the multiple might fall if industry conditions or returns on equity deteriorate.
Check for yourself
- How much net income is assumed to go to dividends and how is the share count expected to change?
- Even with the same book value, what multiple might the market assign if returns on equity and risk change?
Limits of application
All figures are hypothetical and do not estimate any company’s book value, price target or fair multiple. Total returns including dividends, taxes and trading costs are excluded.
- What to look for
- See why investors can interpret the two companies’ earnings and share prices differently in the same memory market.
- Why it matters
- Separate book value per share from the market multiple when evaluating downside, and distinguish payout decisions from plans and supply agreements from actual shipments.
Timeline
8 segmentsRather than attaching a target multiple to near-term earnings, the guest considers how much Samsung’s profits could increase book value per share. Forecasting book value requires assumptions about net income, dividends and share count, and the share price can fall even as book value rises if the market multiple contracts. The suggested book values and price levels are the guest’s estimates rather than a floor against losses or trading rules.