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re: what's supporting the market?

Posted on 4/13/11 at 7:36 am to
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 4/13/11 at 7:36 am to
What "fundamentalist" was "correct" with Yahoo at a P/E of 2000x?
Posted by OohPooPahDoo
Member since Apr 2011
734 posts
Posted on 4/14/11 at 1:49 am to
quote:

What "fundamentalist" was "correct" with Yahoo at a P/E of 2000x?


The market doesn't just take into account present earnings but future earnings as well. A company that has negative earnings can be highly valued if the investors believe the future returns will be high.

Not saying yahoo wasn't overvalued obviously - but merely the fact that P/E is high doesn't mean a stock is overvalued.
This post was edited on 4/14/11 at 1:50 am
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