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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (44627)	9/28/2011 10:33:09 AM
From: Sergio H	Read Replies (1) \| Respond to of 78473

And for an opposing point of view, here's an argument that based on P.E. stocks are historically expensive. finance.yahoo.com

To: Sergio H who wrote (44627)	9/28/2011 2:03:43 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78473

"Again from a value perspective, do you ignore the substainability and buy based on past performance or consider the future in finding value?" In less volatile times, I presume that the stock price of a company will reflect the consensus of what people believe the company's future to be. If the consensus' concern about sustainability is significant enough to where the stock price is already very low in anticipation of this (i.e. the future's already baked into the stock price), then based on past performance, some hope that maybe people are overly negative, and that things might improve in 1-2 years, from a value perspective I might be interested in making a buy.

To: Sergio H who wrote (44627)	9/28/2011 4:37:53 PM
From: J Mako	Read Replies (1) \| Respond to of 78473

<Again from a value perspective, do you ignore the substainability and buy based on past performance or consider the future in finding value?> I think that's why Graham advocates using 10 years averaged earning as proxy for "earning in normal business environment". Another thing is, this will only work if the company operates in stable industry with stable profit. Shilling's PE10 is a much better indicator than TTM PE for the same reason.