Monday 14 January 2013

Understanding The Stock Market

Understanding The Stock Market Details
 The P/E ratio is the price to earnings ratio. Since stock prices vary, as do the company's profits, it's difficult to compare two different company's profitability unless you have a common factor. That's the P/E ratio. The P/E ratio is most useful comparing two companies in the same industry. To find the ratio, you divide the price per share by the earnings per share. The bigger the number the more overpriced the stock is. Investors use this information in one of two ways. They buy a stock with a high P/E because it implies that people expect the stock price to grow dramatically. Or, they bypass the stock in favor of an undervalued stock with a low P/E, believing that company is stronger and overlooked. Selecting companies with a low P/E is less risky than purchasing those with a higher P/E.
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
Understanding The Stock Market
                   

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