我的吐血之作居然被淹没了，再贴一次，谁教我是雷锋呢--the danger of paying high PE

Paying high PE for mediocre stocks is a dire mistake, needless to say. But even for robust stocks, paying high PE can equally be a nightmare.

Admittedly, stably growing company may be hard to wait for with a bargain PE. MO's PE is often above 15, NKE's PE is often around 20. But overpaying for high PE is a serious mistake. For example,

* a stock with 15% growth rate in 10 years will have its earnings boosted to 404%.

* If PE remains the same, final price is 4.04, CAGR=15%.

* If PE falls from 30 to 20, a 33% drop, final price is 4.04x0.66=2.70, CAGR=10%. Much less than 15%!!!!

PE gradually falling in a few years may not be apparent, as rising E can offset the falling. Price may even slowly and deceitfully go up. Nonetheless, while PE falls quietly, you lose money quietly, money you could otherwise have earned!!!

所有跟帖： 

• 那只有AMZN， NFLX是例外了 -topten- ♂ (0 bytes) () 12/04/2015 postreply 19:44:43

• 例外很多，但是宁可错杀一千，也不能陪上血汗钱；而且此规则不适于前途远大而难以估值的新公司 -Labourse- ♂ (0 bytes) () 12/04/2015 postreply 20:26:27