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by amunicio
3887 days ago
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The price earning ratio is useful to compare companies in the same industry that are targeting the same growth level. If P/E was any good indicator of value (in the absolute) the total market cap of Amazon should have been close to $0 during any of these quarters when it barely broke even. I'm not implying that the P/E is worthless, just that it should be carefully applied and in some cases it shouldn't be applied at all. |
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