Timeline for How can trailing and forward P/E ratio of main stock markets show such huge difference
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| Jun 17, 2020 at 9:40 | history | edited | CommunityBot |
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| Jan 20, 2017 at 10:20 | vote | accept | jmgonet | ||
| Jan 20, 2017 at 8:09 | comment | added | Klas Lindbäck | @jmgonet Yes. Note that the P/E ratio is based on earnings post tax, so a chunk of the expected earnings increase could be in the form of tax reductions promised by Trump. | |
| Jan 19, 2017 at 16:37 | comment | added | jmgonet | About my personal opinion of the market being over-optimistic, would it be correct to say that, as PER = Market Value / Earnings, the market expects the US companies to increase their earnings ΔEarning = 100 * (PERf / PERt - 1) = +92% in 2017? | |
| Jan 19, 2017 at 15:39 | comment | added | Klas Lindbäck | @jmgonet The market always looks to the future. You can conclude that the stock markets are overvalued if you assume that earnings won't increase. So, yes, based purely on the 2016 P/E ratios the stock market seems overvalued. | |
| Jan 19, 2017 at 15:35 | comment | added | Klas Lindbäck | @jmgonet I find it intresting that the market seems to value french/spanish profits at a hefty discount compared to US profits. That means that the market sees higher risk in Europe. If 2017 proves to be a good year then european stocks should go better than US stocks. | |
| Jan 19, 2017 at 15:33 | comment | added | jmgonet | What about my first statement? Would it be correct? | |
| Jan 19, 2017 at 15:24 | comment | added | jmgonet | I agree with you, regarding my second statement. By writing 'over-optimistic' I'm expressing my opinion. I'm correcting my conclusion in that sense, because I'm still interested. Is my logic correct, or this P/E ratio thing is meaningless? | |
| Jan 19, 2017 at 14:47 | history | answered | Klas Lindbäck | CC BY-SA 3.0 |