Friday, July 16, 2010

The Case Of Price-to-Earnings Ratio

I am not a big believer in price/earnings measures as they move in regimes. This means that the average can be 15 for 20 years and then 8 for the next 20. Unfortunately you don't know in what regime you are until after the facts, which makes comparisons difficult is not outright impossible.

~~ Philippe Gijsels, the head of research at BNP Paribas Fortis Global Markets

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