Why the Price-Earnings Ratio is a Hoax
Subtitle: Tesla Spotlights the Curse and Cure
Publisher: MintKit Institute
Published: 2021
Place of publication: MintKit.com
Language: eng
Format: Ebook
Number of pages: 15
Copyright date: 2021
First sentence: In the popular image of investors and the received wisdom of pundits, the principal measure of value for a stock lies in the ratio of price to earnings.
Description: By popular perception and received wisdom, the proper way to vet a stock for investment lies in the ratio of price to earnings. However, this hoax hides the reality. Instead, a truer measure is the ratio of price to earnings relative to the growth trend in profits. A showcase involves a matchup of Tesla against other titans of the stock market.