A recent Forbes article suggests that true value investing requires a comprehensive approach to analyzing companies, not just a reliance on the price-to-book value.

The article cites two comments made by Berkshire Hathaway CEO Warren Buffett in 2018 might “serve as the epitaph on the grave of the old era of value investing. The first, from Buffett’s 2018 letter to Berkshire shareholders, reads: “The fact is that the annual change in Berkshire’s book value…is a metric that has lost the relevance it once had.” The second was made by Buffett in the same period: “I was wrong in a couple of ways about Kraft Heinz. We overpaid for Kraft.”

“The common thread here,” the article argues, “is the limitations of accounting book value,” adding, “accounting rules lead to Berkshire’s numerous operating companies appearing undervalued on the balance sheet. The same rules led KHC’s balance sheet to significantly overstate its value.”

Much of today’s value investing, the article contends, relies heavily on accounting book value “and other metrics whose utility has atrophied significantly over the years” and supports its thesis with an analysis of how price-to-book value can lead to inflated valuations.

“Very few investors these days can truly be classified as ‘value’ investors,” the article argues, adding that most bypass the work involved with properly analyzing companies to see which are trading below their fair value. It concludes: “People that declare value investing is dead because companies with low P/B’s have underperformed over the past decade are confusing the means with the end. Price-to-book is just one way that investors have attempted to execute value strategies.” Value investing isn’t dead, the article says, “but it has gotten harder.”