Growth vs. Value Stocks: Cash Flow Duration and P/E Math
Understand the difference between growth and value stocks, from cash flow duration and interest rate sensitivity to P/E multiples and portfolio balance.
Understand the difference between growth and value stocks, from cash flow duration and interest rate sensitivity to P/E multiples and portfolio balance.
The price-to-earnings ratio is the most-quoted valuation metric on Wall Street. Here’s the formula, trailing vs forward, and when it breaks.
P/E ratio formula, trailing vs forward, sector benchmarks, Shiller CAPE, and the five cases where price-to-earnings flat-out misleads investors.
P/E in plain English: the formula, a worked example, sector ranges from NYU’s Damodaran, and why the Shiller CAPE near 42 sits within a whisker of the 1999 peak.