I am a new investor and trying to learn about the market, my question is about
the P/E ratio I understand what it is and how to calculate it, but I need to
know if a stock is a buy when it higher or lower?????
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I somehow left out probably the most important 'comparable' use..the P/E ratio
should be comparable (optimally below) to the companies growth rate.
Lower, but you have to understand that P/E ratios in general are mostly useful
as a comparison metric (compared to the overall market, compared to the
industry, compared to competitors, compared to the P/E a company has
historically traded for etc..
Bottom line is if you don't know the answer to this question, you have a lot of
reading to do before throwing your money into the market.
lol. mike
important thing to know is that "E" is a crapshoot
1 months ago - Report Abuse
you need to read crammers books. start with "mad money". when you
actually learn how the market works and stocks are valued you'll be ready to
start investing. until then save your money. mike
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