“Firms that have a high BE/ME (a low stock price relative to book value) tend to have low earnings on assets. Conversely, low BE/ME (a high stock price relative to book value) is associated with persistently high earnings.”

— Eugene Fama

Source: Common risk factors in the returns on stocks and bonds, 1993, p. 8

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Eugene Fama 6

American economist and Nobel laureate in Economics 1939

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Context: It is safer to try to understand the low in the light of the high than the high in the light of the low. In doing the latter one necessarily distorts the high, whereas in doing the former one does not deprive the low of the freedom to reveal itself as fully as what it is.