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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club

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To: Alan Whirlwind who wrote (3820)3/14/1999 1:34:00 PM
From: MrGreenJeans  Read Replies (1) of 15132
 
Trailing Price Earnings Ratio

The P/E ratio on the S&P 500 went over 34 this past week

Perhaps you or someone else can tell me why a trailing price earnings is relevant. I suggest to you that only forward earnings projected price earnings ratio are more relevant. What happens going forward on an ongoing basis is more relevant. If I were to examine a particular stock and they had new products being introduced into the market why would I care about a trailing p/e? I would only care about how their profits would change in the future.

Why look back? Seems futile. Let us be concerned about what is going to be rather than what was...

So why is a trailing p/e meaningful?
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