The p ee ratio is a very commonly used value on tool for figuring out, as you said, how much investors are paying for one company versus another. Why is it that in different industries you'll often see wildly different p e ratios? So for example, you'll see incredibly different common p e ratios in the utility sector versus the tex sector.
#369: To answer these questions, we need a deep, tree-trunk understanding – a core, fundamental understanding – of how the stock market operates.
What, exactly, IS a stock – and how are stocks valued? What’s the difference between the Dow Jones, the S&P 500, and the Nasdaq? Why is the market a voting machine in the short-term, but a weighing machine in the long-term?
Brian Feroldi, the author of “Why Does the Stock Market Go Up?,” joins us for a Stocks 101 explainer episode.
If you’d like a deeper understanding of the world of stocks, you’ll enjoy this explainer episode.
And if you have a friend/spouse/coworker who’s said, “I need to learn more about investing,” share this episode with them.
Enjoy!
For more information, visit the show notes at https://affordanything.com/episode369
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