One important thing to be considered is that PE is indusrty specific... There is no point using it as a tool for comparing Stocks from different industries..
Why do you have to confuse an average investor.Fundamentals of a Company can be assessed by several factors.As far as an investor is concerned so long as the money invested grows it is all right.If ,for example ,I buy a share for Rs 100/- today and it is Rs113/-in one or two months it is fine.Without going into EPS,PE and so on I had been buying and selling shares for the past 12 years starting with as small an amount as Rs20000/- and despite suffering a few setbacks my overall earnings are around Rs 8lacs.I had been pursuing this as apastime!
Re: Confusion most confounded
by Check Out on Nov 09, 2010 03:04 PM
You buy and sell in short term right? You are not investor. PE is for long term investor
It would be easier for common men to understand if you had given examples of companies that have lower and higher PE ratios alongwith reasons for them.