Ndubuisi 'Andy' EgwimMoney Coach for Medics|Ex-NHS GP|21+ Yrs Investor| Founder, MoneyWiseDoctor.com|Helping Medics Avoid Big Money Mistakes

Why Paying 10X for Stocks Could Destroy Your Wealth

29 Apr 2025 · 1 min

Watch on YouTube

0:54

A short YouTube talk by Ndubuisi 'Andy' Egwim arguing that market price is not the same as intrinsic value. He illustrates with a hospital-share example: the hospital has a book value of £5 million and 1 million shares (implying £5/share); someone offers shares at £50 (10× book value), and buying at that price would require the hospital's value to increase tenfold to justify the purchase. The clip emphasizes skepticism about paying large premiums over book value.

Questions this video answers

£5 million

1 million shares

£5 per share

£50 per share

10 times the book value

Chapters

The price is not the value. The price is determined by the market. The market is a voting machine, not a weighing machine. The market is just determining. This is the price of this stock, not necessarily the value. Does that make sense? So the value, according to what we determined here, is that the book value is £5 million for all the shares. And because there are 1 million shares there, each of those shares, one by one, is five pounds. So if somebody comes to sell it to me at £50, I'm going to say, hang on, hang on, why should I buy £50? What are other hospitals selling for? And what is my guarantee that this hospital, if I buy it at £50, that means I'm expecting that the hospital is going to go from £5 million to £50 million, and even better in the future, because they are buying it at 10 times the book value.