{I know P/E ratios are not everything }Company A has great earnings, a strong balance sheet, great future prospects, and a great management team. In addition to that, the profits will grow and the business model is understandable. The only problem is that it is trading at 35X earnings. Wouldn't you think legendary investors like Graham and Warren Buffet have missed these companies solely because they never touch these companies that have over 20 P/E ratios? Graham uses the 15X to 20X barometer too. Wouldn't you think Buffet may have missed great companies because of this so called "value" approach and buying good businesses? Also, what if the stock is a really a value but the market just overreacted a little before you analyzed the company? So why do big portfolio managers care about this PE ratio when there are still good companies that are growing earnings and have a great management team? If you come across a stock like this, how will you approach it?
Submitted January 06, 2018 at 06:40PM by Stuffmatters_123 http://ift.tt/2CDfUs4
