Few things divide the investment community as much as valuations. This division is what drives markets and in the most classical sense the efficient discovery of a price for a security. That may be good in theory but human emotions are the real daily drivers of market prices, and most often do not represent the true value of any firm. These emotions lead to quirks in the value of ratios, often and unfortunately at times the sole determinant of investment decisions.
http://www.sundaytimes.lk/110424/BusinessTimes/bt25.html
From : Sunday Times of 24/04/2011
By : Kajanga Kulatunga.