In addition, this creates the notion that stocks with high P/E ratios should be written off as expensive (meaning opportunities often lie hidden in this group).
The problem, though, is that a company with a high P/E ratio may not actually be expensive. A company with a P/E ratio of 50 -- or higher -- may be cheap. Which means...
You see, the problem with the P/E ratio is that it's a retroactive metric. ...
...The problem, though, is that a company with a high P/E ratio may not actually be expensive. A company with a P/E ratio of 50 -- or higher -- may be cheap. Which means...
For some companies, the P/E ratio is meaningless.
It's a bold statement, but stick with me.
You see, the problem with the P/E ratio is that it's a retroactive metric. ...