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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (25174)	9/8/1999 11:29:00 AM
From: Craig Richards	Read Replies (1) \| Respond to of 99985

Heinz, Averaging P/E ratios can cause some strange results. If a company has a 10 billion market cap and makes a profit of $100, then its P/E ratio is 100,000,000. If you average this number with a few thousand other stocks' P/Es, this single stock will throw off the average by quite a bit. In this case the median P/E ratio might be more meaningful. Alternately, it would also be interesting to calculate the total market cap of NASDAQ companies divided by total earnings. Regards, Craig