3 ms·
You'd better believe it. Always look at the fundamentals of a stock. What is the P/E? Do you know what the definition of the P/E is and why it is important? Buy
by simonblack 5y ago
You'd better believe it. Always look at the fundamentals of a stock. What is the P/E? Do you know what the definition of the P/E is and why it is important? Buying a stock with a P/E greater than about 20 is poor judgement (unless you're gambling on it going up further). A P/E of 20 means that there is only a mere 5% Return on Investment. If current inflation is greater than 5% (which it is), you're actually losing money on that stock every year.
Are you getting into stocks because the underlying business model of the company is good? Or is it because you expect the stock price to go up, at which time you might sell that stock? If it's the first, that's investment. If it's the second, that's just glorified gambling.