A Quote by Barry Ritholtz

To know whether stocks are cheap or pricey, we typically look at price-to-earnings ratio. Valuation is a tougher question than many folks realize.

Barry Ritholtz

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Cheap Earnings Folks Know Look Many Price Question Ratio Realize Stocks Than Tougher Valuation Whether

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Barry Ritholtz
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People forget that although we can pinpoint the price, we can only guess at future earnings. The past isn't much help: It simply tells whether a market was pricey or cheap.

Barry Ritholtz

It's nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.

Benjamin Graham

Calculate a stock's price/earnings ratio yourself, using Graham's formula of current price divided by average earnings over the past three years.

Benjamin Graham

I buy stocks when they are battered. I am strict with my discipline. I always buy stocks with low price-earnings ratios, low price-to-book value ratios and higher-than-average yield. Academic studies have shown that a strategy of buying out-of-favor stocks with low P/E, price-to-book and price-to-cash flow ratios outperforms the market pretty consistently over long periods of time.

David Dreman

One common way of judging whether housing's price is in line with its fundamental value is to consider the ratio of housing prices to rents. This is analogous to the ratio of prices to dividends for stocks.

Janet Yellen

Of course, the discounting of future earnings should hurt all stocks. But it should hurt technology stocks more than others, because so many of them are valued at extremely high levels relative to their current earnings.

Alex Berenson

Auctions typically are an opportunity for you to be able to acquire what you're looking for at a lower price; typically, the auctioneer sets the opening price at much lower than the retail price and certain interest develops and as more people come in it drives the price up.

Alexander Gilkes

If you can follow only one bit of data, follow the earnings - assuming the company in question has earnings. I subscribe to the crusty notion that sooner or later earnings make or break an investment in equities. What the stock price does today, tomorrow, or next week is only a distraction.

Peter Lynch

One of the big problems with growth investing is that we can't estimate earnings very well. I really want to buy growth at value prices. I always look at trailing earnings when I judge stocks.

David Dreman

It's an earnings-driven market. The big question is whether the flow of earnings can rescue the market from the twin dreadnoughts of higher oil and interest rates.

Larry Wachtel

The question for Dropbox is whether, when they run out of private sources for funding, they will be able to maintain that valuation when they go to public sources for funding and their valuation is set on the public markets.

Aileen Lee

Investors have been too willing to buy stocks with strong reported earnings, even if they do not understand how the earnings are produced.

Alex Berenson

Rising interest rates are considered bad for stocks because they raise the cost of doing business and depress corporate earnings and because higher yields make bonds relatively more attractive than stocks to investors.

Alex Berenson

In an ideal world, the intelligent investor would hold stocks only when they are cheap and sell them when they become overpriced, then duck into the bunker of bonds and cash until stocks again become cheap enough to buy.

Benjamin Graham

The enthusiasm for Tesla and other bubble-basket stocks is reminiscent of the March 2000 dot-com bubble. As was the case then, the bulls rejected conventional valuation methods for a handful of stocks that seemingly could only go up. While we don't know exactly when the bubble will pop, it eventually will.

David Einhorn

A young financial writer once brought ridicule upon himself by stating that a certain company had nothing to commend it except excellent earnings. Well, there are companies whose earnings are excellent but whose stocks I would never recommend. In selecting investments, I attach prime importance to the men behind them. I'd rather buy brains and character than earnings. Earnings can be good one year and poor the next. But if you put your money into securities run by men combining conspicuous brains and unimpeachable character, the likelihood is that the financial results will prove satisfactory.

B. C. Forbes

A Quote by Barry Ritholtz

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