The Traderszone Network

Published in TZ Latest News 20 July, 2017 by The TZ Newswire Staff

Rule Breaker Mailbag: Are Historic Market P/E Ratios Still a Good Gauge of Market Frothiness?

In this segment from Rule Breaker Investing, Motley Fool co-founder David Gardner gives some thought to what his questioner views as a natural outgrowth of the idea that “winners keep winning.” We can gauge whether a market is “pricey” or over-exuberant based on how price-to-earnings (P/E) ratios generally look compared to historic averages. However, this needs to be seen in the context of interest rates.

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