P/E Ratio Basics

The price-to-earnings, or P/E, ratio compares a stock’s price to its annual earnings per share, or EPS. It measures how much an …


  1. Management, product and brands, innovation and most importantly is the company operating ethically are also key measures as well. Cash flow statements and footnotes and annual reports to Sec are just as important. Great videos. 👍

  2. Does the lower half of P/E ratio stocks outperform the upper half of P/E ratio stocks, given their cheapness for buying last year's earnings? Or are they cheaper than the average market P/E ratio generally because the growth of their earnings next year is projected to be worse than the upper half of P/E ratio stocks, except for rare exceptions, where the stock market keyword: inappropiately hammered their stock price making them a true bargain? Also, how good are earnings growth projections? Does the stock market get earnings suprises often, or can people pretty much tell where a company's earnings is headed, giving other ratios like the PEG ratio statistical validity?

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  4. 0:52 The P/E Ratio compare the stock price to Earning per share(isn't it?), instead of just compare the stock price to the company earning. Because if you just compare the stock price to the company earning, it would be influence by the total share of the company.

  5. P/E Ratio is a worthless metric. A share of stock is a tiny piece of the Co. IOW, you're buying the Co. not the Co.'s earnings. A far more meaningful metric is the P/N ratio or Price to NAV. I've been investing in the mkt since 1967 and I don't even know what the P/E ratio of my investments is and I don't care! I created a spreadsheet tracking 41 CEF's, Corps & Muni's and one of the metrics I use tracks E/D ratio (Earnings to Dividends). Think of it as what comes IN to what goes OUT. This is a direct measure of a Co.s sustainable survival.

  6. Reading customer product reviews and checking vids of the CEO on youtube to see if he’s a shmuck or not is probably 1000x more useful than P/E ratio.

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