Valuations matter in the long run. That’s important to remember. Especially at times like this when almost every valuation metric indicates the stock market is expensive. There are many definitions of these terms, but, to me, valuation metrics are tools to normalize the relationship between stock prices and fundamentals. Popular metrics include the price-to-earnings (P/E) ratio and price-to-sales (P/S) ratio. There are dozens of these indicators, and each has its advantages and disadvantages. —Recommended Link— Create a 10%+ Income Stream for Life We’re sitting on a collection of the safest, most generous monthly payers available. And while $11,200 in… Read More
Valuations matter in the long run. That’s important to remember. Especially at times like this when almost every valuation metric indicates the stock market is expensive. There are many definitions of these terms, but, to me, valuation metrics are tools to normalize the relationship between stock prices and fundamentals. Popular metrics include the price-to-earnings (P/E) ratio and price-to-sales (P/S) ratio. There are dozens of these indicators, and each has its advantages and disadvantages. —Recommended Link— Create a 10%+ Income Stream for Life We’re sitting on a collection of the safest, most generous monthly payers available. And while $11,200 in dividend checks is a welcome addition to anyone’s income, investors also love racking up capital gains as high as 446%. Start generating a 10%+ income stream for life today from these consistent companies. Normalizing is a way to make numbers comparable. For example, if we are talking about company earnings, we might find one company has $10 million in earnings and another has $100 million in earnings. By itself, this information really doesn’t tell investors anything about how the stock is valued. To make earnings more comparable, companies often report earnings per share (EPS). Assuming the first company has 10… Read More