Showing posts with label PE ratio. Show all posts
Showing posts with label PE ratio. Show all posts

Saturday, October 27, 2012

A useful chart for investors

This is a useful chart:

Price to Earnings Ratio (PE ratio), 1900 to present


The PE ratio is a reasonable guide to the price of stocks.  Generally speaking when PE ratios exceed the 10-15 range, that seems to be a pretty good indicator that we are getting into the froth area of a bull market and that it might be time to heavy up on cash.