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by immibis 251 days ago
As another comment pointed out, P/E 25 is still absolutely insane. Realistic ordinary numbers are more like... 5 - since that means with 100% of the company's earnings going to dividends, it would take you 5 years to break even. 100% of the company's earnings don't go to dividends, though, so probably 10 years or more. Which is about the longest that a company that pays the highest dividends it can could be expected to last.

A P/E of 25 only makes sense if we expect Google to pentuple its earnings. Already one of the biggest companies on the planet, become five times as big? It seems preposterous.
1 comments
Karrot_Kream 250 days ago
The P/E of Coca Cola is 22.96.
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solumunus 250 days ago
What is your point? This seems completely irrelevant to the subject comment.
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senko 250 days ago
It’s relevant to point out a regular nontech slowgrowing company like CocaCola has a PE of 20+, therefore the claim that a normal one is 5 is mistaken.
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immibis 250 days ago
I said insane, not abnormal. Insanity is often normal.
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senko 250 days ago
20-year average P/E for US stock market as a whole is ~20 (current s&p500 forward estimate is 24). Historically they were a bit lower (eyeballing it at 15), and in the aftermath of the Great Depression they it was aroun 10.

You want to claim the US stock market for the past 100 years is insane, go ahead, but that's a different argument than saying Google or NVIDIA, only slightly above the average for S&P500, are overpriced compared to the rest of the market.

And if the entire market is overpriced, where you going to invest instead? Crypto? Gold? Both shot up much more. Real estate? Bonds? Europe? China? Better have a good thesis on that.

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