Insights: Peter Lynch teaches you the true nature of price-earnings ratio
Many investors speculate on stocks and are used to looking at price-earnings ratios. First of all, there may be many online tutorials. The first lesson of fundamental analysis is the price-earnings ratio. Secondly, many market software, the price-earnings ratio is always placed in a very conspicuous position, and the pure value can judge the stock price, very easy to understand. .
So whether it is a retail investor or an institution, it will tell us that when the price-earnings ratio is in the position, the stock price is overvalued, and when the price-earnings ratio is in the position, the stock price is underestimated. But when the big-level market is coming, many strategic organizations will try their best to come up with various reasons to prove that the current price-earnings ratio is so high. Looking back at the US Nasdaq technology network stock bubble in 2000 is ridiculous, but when you are in the situation, it is not so ridiculous.
How should the price-earnings ratio be understood? What is the real meaning behind it? If you understand this video, you may be able to really understand something.