Understanding the P/E ratio

"Price is what you pay, but value is what you get." Warren Buffett If you think that you can make money by simply investing in a growth stock, then think again. Even if you buy a fabulous business that consistently grows its profits, you are unlikely to earn returns on your investment if you pay a fortune on acquiring the shares. This is precisely where the importance of buying a business at a sensible price comes into play. And to calculate a sensible price, you need to use valuation metrics. Price-t

This article was originally published on November 24, 2020.