Nuggets of Investing Wisdom

Nuggets of Investing Wisdom

A website for serious investors in common stocks

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price earnings ratio

Problems with CAPE Part lll

  • by Rodney Smith
  • Posted on May 3, 2020October 24, 2020
  • Part 5: Asset Management

Wrap up on the drawbacks of CAPE. A fair level for price earnings ratios has changed over the years.

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Problems with CAPE – Part ll

  • by Rodney Smith
  • Posted on April 26, 2020December 1, 2020
  • Part 5: Asset Management

Investors are reading CAPE all wrong.

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What is the right price earnings ratio?

  • by Rodney Smith
  • Posted on March 8, 2020January 15, 2021
  • Part 7: Building and Managing a Portfolio

Price earnings ratios are a frail and shifting basis for determining fair value. They do not force investors to think through all the factors that go into a deep assessment of fair value.

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Is the price earnings ratio (P/E) obsolete?

  • by Rodney Smith
  • Posted on November 10, 2019January 15, 2021
  • Part 7: Building and Managing a Portfolio

Price earnings ratios are simply a rule of thumb. They can lead you astray. But what is worse, they are becoming less and less valid with every passing year.

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The under-performance of value stocks explained

  • by Rodney Smith
  • Posted on August 8, 2019January 15, 2021
  • Part 4: Principles of Operation

There is a lot of talk currently about the underperformance of value stocks compared with growth stocks over the last fifteen years. In fact, value investing has performed well against all other styles. This seeming contradiction comes from the fact that value investing and investing in value stocks are not the same thing.

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