Just a beginner blog of some of the limitations of some numbers and ratios. PE. There is limitations if the company you are looking at is highly cyclical. It my be at the peak of the cycle and hence PE is at the lowest, but earnings might fall, and PE increase. Earnings of core operations might not be that high, earnings might be very high due to revaluation of assets (properties or biological). Palm oil companies have good revaluation of their plantations due to the increasing CPO prices. Such revaluation might be one-off and are unsustainable. If you are looking to invest in a good turnaround company, you might still buy into a company with high PE anyway. So, one might look at the industry and company, and compare average PE with another peer and think about PEG for PE to be useful. P/B Not all assets are equal. ......