PE ratio: Is that stock overpriced?

Previously I wrote about the common misperception that a high-priced stock is “expensive,” while a low-priced stock is “cheap.”  I said that stock price doesn’t matter. This raises the inevitable question: Q. How can you tell if a stock is expensive or cheap? A. Use the Price-Earnings Ratio (aka the “PE Ratio”) The PE ratio […]
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Stock price does not matter

That’s right. The fact remains: Stock price does not matter. Huh? Many people think that the higher a stock price, the more “expensive” a stock.  The lower the stock price, the “cheaper” a stock.  Right now, as I write this (on April 19, 2012), Apple stock is trading at $595.55 a share.  Google is at […]
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