Discover and read the best of Twitter Threads about #PEratio
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#PERatio is the most widely used valuation ratio. But very often, it can be highly misleading and is very often misinterpreted by investors.
In today’s thread, let us understand how to use the ratio and deep dive into the factors influencing it.
#Investing #valuation #stocks
In today’s thread, let us understand how to use the ratio and deep dive into the factors influencing it.
#Investing #valuation #stocks
What is PE?
PE ratio is calculated as shown below:
PE ratio is calculated as shown below:
What the P/E simply means is how much are you willing to pay for ₹1 earning of an asset. So using this analogy for stock investing, the lower the PE ratio the cheaper the stock is and vice versa.
Smallcaps have a reputation of being risky, unlike their bigger peers. However, Richa Agarwal, Editor of Hidden Treasure (Equitymaster's smallcap recommendation service) and her team, have broken this myth. #smallcapstocks
Since inception in Feb 2008 until September 22, the verified IRR (Internal rate of return) for Hidden Treasureis at 26.9%, beating benchmark indices by almost 3x.Here's is what I expect for smallcaps in 2023. #SmallcapMultibaggers #topsmallcapsfor2023
Some reflections first…2022 was a challenging year with Russia Ukraine war, supply chain disruptions, inflationary pressures, tech meltdown, slowdown in global economies and locks downs in China. And the rough ride is not over.
Layman’s explanation to PE Ratio and how it works.
A long thread! Do Bookmark this for patient reading.
#investing #investors #PEratio
A long thread! Do Bookmark this for patient reading.
#investing #investors #PEratio
1/ PE (Price Earning) ratio is one of the most important metric used by investors to make decisions while picking up stocks. But, more often than not, it is grossly misunderstood.
Let us decode this metric.
Let us decode this metric.
2/ Table of contents
•How to decide what to buy?
oCase A: Case A: Fresh Apple vs Stale Apple
oCase B: Costlier Fresh Apple v/s Cheaper Fresh Apple
oCase C: Apple vs Orange
•How to read PE ratio
•How is PE Ratio misunderstood?
•When will PE Ratio not work?
•How to decide what to buy?
oCase A: Case A: Fresh Apple vs Stale Apple
oCase B: Costlier Fresh Apple v/s Cheaper Fresh Apple
oCase C: Apple vs Orange
•How to read PE ratio
•How is PE Ratio misunderstood?
•When will PE Ratio not work?
Nifty PE Ratio at 28.86 (Highest level in 2020)
Nifty has moved from 'Screaming Sell' to 'Buy' to a 'Screaming Sell' once again in 12 months.
#Nifty #nifty50 #PEratio #Pricetoearnings
Nifty has moved from 'Screaming Sell' to 'Buy' to a 'Screaming Sell' once again in 12 months.
#Nifty #nifty50 #PEratio #Pricetoearnings
Heres a similar view based on a study of different parameters...
We are in the 6th consecutive weekly rally in nifty. The previous two longest rallies in last 5 yrs lasted for 8 and 7 weeks in Jan-2018 and Apr-2019 resp. All three rallies are 15 months apart from each other.
