Traditional value investing has struggled in recent decades, potentially highlighting a flaw in relying on commonly used value ratios such as book-to-price and earnings-to-price. These measures overlook profits that will be realized in the future and therefore only partially capture a company’s true economic value. The prolonged low-interest-rate environment over the past 30 years has made future profitability an even more important determinant of a firm’s value. By focusing on short-term accounting metrics and ignoring future economic profitability, these ratios often cause analysts to mislabel a company as cheap or expensive without accurately establishing whether it is truly overvalued or undervalued.