You need to “get it” because it’s really important.
We’re all in here arguing about PE ratios of tech companies reaching 100x. Is that too much? Who knows. For the best tech company in the world? What is the limit?
But for other companies like Tesla, their PE was once 1000x. That’s crazy town.
PE is the first number you should use for comparing two stocks to determine value vs risk.
People get too caught up on the listed/current PE, but what matters is forward PE. The stock market is about the future, and growth company PEs as listed are always going to be behind.
We’re all in here arguing about PE ratios of tech companies reaching 100x. Is that too much? Who knows. For the best tech company in the world? What is the limit?
But for other companies like Tesla, their PE was once 1000x. That’s crazy town.
PE is the first number you should use for comparing two stocks to determine value vs risk.