3 ms·
Devils advocate here. So the PE ratio is absurdly high for many stocks... so what? stocks are not like clothes or food. you don't get a fraction of their profit
by AznHisoka 9y ago
Devils advocate here. So the PE ratio is absurdly high for many stocks... so what? stocks are not like clothes or food. you don't get a fraction of their profit/earnings for your stock (ok dividends is like that a little, i concede)
people will continue to pay higher prices with no regard to whether its "expensive" if they feel confident in the economy. And ultimately if they feel a greater fool will buy them in the future.
- wils1245 9y ago>> people will continue to pay higher prices Why are you sure if that? The opposite is true. At some point stockholders will get afraid and pull back. The question is how much, and who gets hurt the most. I think the point of the parent comment isn’t that a high PE ratio is inherently bad, but that these stocks are more highly valued relative to revenue than stocks usually are.