6.

THE PRICE/EARNINGS RATIO

We’ve gone on about this already, but here’s a useful refinement: The p/e ratio of any company that’s fairly priced will equal its growth rate.

I’m talking about growth rate of earnings here. How do you find that out? Ask your broker what’s the growth rate, a...

Unfortunately, there's no P/E ratio set in stone that makes a stock a buy if it's below, or a sell if it's above.

Often value investors and growth investors will look for different things in a P/E ratio. 

• Value Investors - the lower the P/E ratio the better.
• Growth Inves...

If the p/e of Coca-Cola is 15, you’d expect the company to be growing at about 15 percent a year, etc.

But if the p/e ratio is less than the growth rate, you may have found yourself a bargain. A company, say, with a growth rate of 12 percent a year (also known as a “12-percent grower”) and...