Zax...I have to get back to my original comment of believing you are paranoid...However, I will grant you that low P/E'd stocks are already, and will continue, staging a comeback, and have been beaten down unmercifully...This is not anything new in the history of the Market...This is a very predictable cycle.
To keep myself abreast of the market as a whole I follow the Russel 2000, Wilshire 5000, S&P 400 to gain a view on the "overall" market..I'm pleased to see them all doing well....In a football game I will root for the underdog, if it's my football team anyway..I'm loyal to my team....However, in investing, even though I may believe there is greater "value" in rooting for particular companies, I look at a bigger picture..It's not about picking sides..It's about picking winners....The overall combination of fundamental understanding of the market, a sector, a company eventually leads one to an educated "feel" for what companies to buy...It's not something you learn at a university..It's something else-part knowledge, part technical, part "feel"....
My own personal journey wasn't always investing in high P/E companies...In fact it was in trading commodoties...and it grew from there--penny stocks, and low P/E companies included...I have made MORE money in high P/E'd stocks, studied why that was, and found that for several decades P/E had a whole lot less to do with making money than what many people think...It's just that the really good companies much of the time will have high P/E's...I've actually come to view this as ONE indication I'm on the RIGHT track in selecting a company to buy into....
I don't want to sound condescending, even though I'm sure it's going to be mistaken as such, but being concerned with P/E is a sign of an inexperienced investor, IMO...Way too much importance is given to it.
Regards, George |
