That is the whole point my friend said P/E is meaningless, a fiction that investors choose to justify prices paid.
A meaningful measure should NOT fluctuate so much between good market and bad market - a meaningful measure should work in ALL market conditions, that you can rely upon to make a profit, and thus make a living, in the friend's case.
One more thing to consider, a lot of the benefits from advancement of technology, cost reduction from productions, etc etc have been realized. It would be very hard to find the Next Big Thing...
I am the amateur of the amateurs here, but I respect those who do this day in day out to craft out not only a living, but a fortune - in both bull and bear markets.
As for me, I just have a humble goal - make every trade profitable - like berniyi just said on CNBC, take small profits all the time when the Market God is willing. It is very fortunate for us to go completely cash since 2nd time DJ hit 14K. 2008 was a travelling year for us with a total of 75 days out of home, and plenty of days pre / post trips having good excuses not to do anything market-wise. This really saved us from going back to market too early, such as last October, when we were on a cruiseship, on our way from Europe to U.S. ;-) |
