This guide is for investors willing to spend significant time assessing and valuing stocks. It is for investors who prioritise a small number of high-quality stocks in their investment strategy.
Buffett has warned in the past that crossing a ratio of 200% -- meaning stocks, measured by market cap, are worth twice as much as U.S. gross domestic production (GDP) -- is like playing with fire.
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These PE ratios are a little high — a “normal” PE ratio is typically somewhere in the 20s — but they’re not outrageous. All three stocks have actually seen decreases in PE ratio in recent years. Plus, ...