*FIXED* Value Investing In Your Car Episode 14 – Why The P/E Is Useless
This post now has the video in it as I apparently forgot to put the video in this post last week. I apologize for that, and hope you enjoy this post and video…
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Download A Free Copy of My Acclaimed Value Investing Education Book How To Value Invest By Clicking Here.
In Episode 1 of Value Investing In Your Car, I answered the question Does Value Investing Work Anywhere In The World?
In Episode 2, I answered the question When Does Value Investing Work Best?
In Episode 3, I told you about the best book I read in 2017, and recommended some other great books that I read in the same year.
In Episode 4, I talked about how my family inspires me to become great and how having someone or something inspire you can change your entire life.
In Episode 5, I talked about how I may have found a new investment for the first time in almost 3 years.
In Episode 6, we talked about Anchoring Bias, its immense power, and how this relates to value investing.
In Episode 7, I’m doing a mini book review of Total Recall: My Unbelievably True Life Story – Arnold Schwarzenegger’s autobiography.
In Episode 8, we talked about the powerful mental model of investing in loss, or as I like to say – when in doubt, kiss the girl.
In Episode 9, we talked about How To Learn Fast By Focusing Small.
In Episode 10, we talked about the most important thing I learned in 2017 – delegation and building a team.
In Episode 11, I reviewed the fantastic book – The Hard Thing About Hard Things by Ben Horowitz.
In Episode 12, we talked about one major caveat to when in doubt kiss the girl in Episode 8.
In Episode 13, I did a book review of the fantastic book, The E-Myth Revisited, by Michael Gerber.
And today we’re beginning a mini-series within this Value Investing In Your Car series about the three most useless terms / metrics in value investing… Today I describe in detail why the P/E Ratio is useless.
You can watch and download the whole Value Investing In Your Car playlist here from our YouTube channel.
Let’s get to this week’s video…
In the 13 – minute video above, I detailed the following reasons why the P/E ratio is useless
- Why P/E is easy to manipulate
- What factors go into P/E
- And more importantly, what real-world factors don’t go into P/E
- What I use instead of P/E
- Why even though I spend 100s of hours researching every company, I end up buying I have zero idea what the company’s P/E ratios are
- And more…
Oh and if you watched the video above and want to learn from the resources I talked about in it, here they are. These also include the graphs mentioned in the video above showing why EV is far better than P/E.
- Financial Shenanigans Book
- Why The P/E Is Useless and How To Calculate EV blog article. This includes the graphs I talked about during the video
- Why The P/E Is Useless – Video from the Value Investing Journey Masterclass
- Free Preview Lesson About How To Calculate Enterprise Value – Lesson Exclusively For Your From Our Masterclass
- Free In-Depth Lesson Step By Step How To Calculate Enterprise Value – Lesson Exclusively For You From Our Masterclass
Let me know your thoughts on P/E below… Do you use it? Has using it helped you now or in the past? Am I wrong? Let me know in the comments below.
P.S. If you’d like to learn how to value and evaluate businesses like a world-class investor, check out our three programs that can help you do this…
Our Value Investing Training Vault, our Value Investing Masterclass, and our $10,000 Coaching Program.
P.P.S. I’m giving away FREE copies of my acclaimed value investing education book, How To Value Invest. To get your free copy, go here.