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I think by at forward PE It’s not nearly as bad.
by mrfusion 5y ago
I think by at forward PE It’s not nearly as bad.
- prewett 5y agoBut forward PE is making a bunch of assumptions of the type the article warns about, namely that the future will be like the past. So by using forward PE you are implicitly making the those questionable assumptions. If you want something to justify high valuations, forward PE is a good measure. If you want a margin of safety, trailing PE and trailing dividend yield are better measures. Margin of safety is thin on the ground these days, sadly.
- mrfusion 5y agoFair points. On the other hand in a high growth environment, current or past PE might be too pessimistic.