| The Essential P/E: Understanding the Stock Market Through the Price-Earnings Ratio Contributor(s): Anderson, Keith (Author) |
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ISBN: 0857190806 ISBN-13: 9780857190802 Publisher: Harriman House OUR PRICE: $23.40 Product Type: Paperback - Other Formats Published: July 2012 |
| Additional Information |
| BISAC Categories: - Business & Economics | Personal Finance - Investing - Business & Economics | Finance - General - Business & Economics | Investments & Securities - General |
| Dewey: 332.632 |
| Series: Harriman Finance Essentials |
| Physical Information: 0.76" H x 6.29" W x 9.16" (0.78 lbs) 214 pages |
| Descriptions, Reviews, Etc. |
| Publisher Description: The price-earnings ratio, or P/E, is the most commonly quoted investment statistic, but have you ever considered what it actually means? For most people it's a shorthand way of deciding how highly the market regards a company, with investors prepared to overpay for earnings from a high-P/E 'glamour' stock as opposed to a low-P/E 'value' stock. However, academics have known since 1960 that the opposite is true: value stocks outperform glamour stocks consistently over decades. A company with a low P/E may have been marked down for no readily apparent reason and thus could represent an attractive value investment for those with the patience to wait while the market re-values it. However, the P/E is a backward-looking measure and just because the company earned 1 per share last year it doesn't necessarily mean it will earn anything like that in the foreseeable future. Or, a low P/E can mean a company is deservedly cheap because it is in financial difficulty - in this case the company is likely to become cheaper yet or even go into administration. This book is a practical guide to how you can adjust and improve the price-earnings ratio and use it, alongside other financial ratios, to run against the crowd and boost your stock returns. |