Bubble vs. Blue Zone
Discover how Strategic Valuation Analysis identifies market extremes through Nvidia’s bubble zone and Precision Drilling’s blue zone collapse — and recovery.

What Nvidia and Precision Drilling Tell Us About Extreme Valuations
TL;DR:
- Nvidia reached a historic 55x price-to-book ratio, a textbook "bubble zone" moment.
- Precision Drilling plunged to 0.05x P/B, then rebounded 66% once it crossed a key threshold.
- Strategic Valuation Analysis (SVA) helps identify when stocks are dangerously overvalued, or deeply undervalued.
Introduction
In this week’s Friday Focus, Ross Healy, Chairman of Strategic Analysis Corporation, walks viewers through two of the most extreme valuation zones in equity markets, the bubble zone and the blue zone.
Using Nvidia (NVDA) and Precision Drilling (PD) as case studies, Ross demonstrates how Strategic Valuation Analysis (SVA) applies mathematical benchmarks to assess when stocks are either due for a correction or poised for a powerful recovery.
🎥 Watch the full video here:
👉 https://youtu.be/QSRRCpA6Twg
The Bubble Zone: Nvidia’s High-Wire Act
Ross opens with Nvidia, a growth stock that surged to an extraordinary 55x price-to-book ratio, which corresponds to HB8 in SVA terms. This is considered the theoretical upper limit of a stock's valuation under the SVA model.
- In 2021–2022, Nvidia peaked at HB6 and then experienced a 35% correction.
- It later hovered around its HB6 price, indicating a potential resistance level.
- Ross had previously issued a sell signal at HB8, warning of unsustainable valuation.
“When a stock reaches HB8, history tells us it can’t stay there long.”
The Blue Zone: Precision Drilling’s Collapse and Recovery
On the opposite end of the spectrum is Precision Drilling, which fell into what Ross calls the blue zone where stocks go "to die."
- At its lowest point, PD hit 0.05x price-to-book, or 5 cents on the dollar.
- This was triggered during the COVID-era oil crash when demand collapsed.
- Once the stock broke above its blue price, it surged 66%, heading toward its fair market value as predicted by SVA models.
Ross calls this one of the clearest opportunities to capitalize on deep-value investing.
Why These Zones Matter
The bubble and blue zones represent quantifiable inflection points where valuation becomes detached from fundamentals either excessively high or unsustainably low.
With SVA:
- Bubble zones help investors de-risk positions that are overextended.
- Blue zones flag deep-value opportunities where balance sheets still matter.
“If you know how to spot these zones, you’re in a position to act before the market does.”
Final Thoughts
Whether you’re looking to take profits on a high-flying tech name or scoop up a beaten-down energy stock, SVA provides a disciplined framework to guide your decisions.
📺 Watch Ross Healy break it all down here:
👉 https://youtu.be/QSRRCpA6Twg