Spinvest: Insane Book Value Ratio

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The banking industry is long known for the importance of Book Value ratio. This is where the stock price is compared to what the value is. Few industries use this since they tend to opt for other metrics.

Banks, however, tend to be a bit stodgy. They accumulate assets over time, this increasing their wealth. Having this as a metric provides a backstop for investors. The closer they can buy to book value, the better it is for them.

A simply way to think about this is to use the idea of "breakup value". If the company was to sell of its assets, what would the investors get?

Traditionally, the banking industry used the idea of a double book value. In other words, if you could get a bank for twice its book value, that was typically a good buy. Anything that was below that was a great deal while far above, you are paying a premium.

Of course, this is a rule of thumb scenario. There could be a very good reason to pay a premium on a bank stock. Thus, what we see here is a guideline.

This is an importance concept in going through the Spinvest Weekly Holdings and Earnings Report. In there we see something very interesting.

The value of the SPI token, when taking all the assets valuation, is 2.05 HIVE. This is made up of both on and off chain investments.

Here is a chart of the value of the token over the last 13 weeks.

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As we can see, the value dropped a little bit. The reason for that is we are pricing the token in Hive and that might have dropped against the off chain investments.

We can compare this to the price of the token which is traded on Hive-Engine.

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Very interesting that the value is a little above 2 Hive while the price is a bit over 4. This means the token is trading at twice its book value.

Like banks, Spinvest is holding assets that have value. The weekly reports show exactly what this is worth in Hive, BTC, and USD.

One major difference is that traditional banks tend not to have high growth rates. The reason why a lot of people like then, historically, is the numbers were dependable. While there was not a ton of upside, the downside was also limited.

Traditional banks were never considered high flyers in the market. They provided consistent dividends and people could count on a steady increase each year.

This is not the case for Spinvest. A major bull run would mean that we are seeing the ability to generation enormous returns. In other words, the growth rate can far exceed that of a traditional bank.

For example, what happens if we see Hive at $2 and Bitcoin at $125,000? Those are numbers that are not outrageous. Yet it would send the value of Spinvest through the roof.

The point is that Spinvest trading at twice its book value is a steal. This is a fund with the potential for much greater growth. Yet the market is still pricing it like it is slow and steady.

A lot of people are going to be surprised when things take off. Most feel the bull market is not done. We are also seeing a great deal of development taking place on Hive. This means that many of the tokens that Spivest is holding can appreciate greaterly.

After all, things tend to follow each other.

Article written by @taskmaster4450.

Posted Using LeoFinance Beta



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6 comments
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Very interesting that the value is a little above 2 Hive while the price is a bit over 4. This means the token is trading at twice its book value.

I am not sure, if I understand this.

The value is in $, the price in Hive. Or am I wrong?

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The value of all SPI assets is about 2 Hive per SPI, but people is paying a multiple of 2, so they are paying 4 Hive for it, discounting "future earnings" or projected events.

Posted Using LeoFinance Beta

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The value of all SPI assets is about 2 Hive per SPI

I think, this might be incorrect. See @spinvests comment :)

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(Edited)

your right. The dollar value is roughly $2 and the HIVE price is around 4.2.

I think Taskmaster has got mixed up and thought that SPI is worth 2 HIVE and trading for 4 HIVE on hive-engine. Happens to the best of us

SSUK

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Ok, good. That's what I thought.

Otherwise I really would have misunderstood all those weekly ernings and holdings reports :D

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13c to 2 dollars feels very nice 😍

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