Any ideas?
why do some stocks trade above or even way above their p/es for a long period of time
- Thread starter TradingBillions
- Start date
Easy, stock prices are just a manifestation of supply and demand. Nothing more, nothing less.
One of the best conclusions i have seen in response to P/E arguements, is that P/E is one dimensional. I.e. P/E in 70s may have different bond/interest/inflation conditions than 2000s, although both look the same.
When shiller makes the P/E argument, I don't see him taking into account the premium over bonds during the periods evaluated (although, he does look at real returns).
Also, for individual stocks; two stocks may have identical trailing P/E, but ignore things like earnings growth projected out into the future.
When shiller makes the P/E argument, I don't see him taking into account the premium over bonds during the periods evaluated (although, he does look at real returns).
Also, for individual stocks; two stocks may have identical trailing P/E, but ignore things like earnings growth projected out into the future.
Growth.