With the new Cabinet in place and the WP working hard to defend what they have won, it is time to get back to real investment! Today we look at our favourite ratio again!
PE or price earnings ratio has been talked to the death on this blog. This is more to just summarize the various ways to look at this ratio, or rather, how many in the investment community looks at it.
1. Cheap or Expensive
The PE ratio, first and foremost, is the quickest way to determine whether a stock is cheap or not. It is obviously not the best way, as most source will give the PE based on next year's earnings. Now why should it based on 1 yr's earnings is beyond me, given that business and the economy in general tend to go through cycles. In any case, we have discussed this about a million ...
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