Warren Buffett explains the reasons for higher P/E ratios

Warren Buffett and Charlie Munger explain the reasons for higher price-earnings ratios. From the 1998 Berkshire Hathaway annual meeting.

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[Geotubest]

They really are brilliant. And love Charlie Munger too. Notice how he didn't miss any part of the question asked. They're both on top of everything.

[Discovery_and_Change]

0:39 PEs move up because people expect the company to do better than others
1:00 Move up in expected earning power and future returns on equity, and changes in interest rates
1:24 Decreasing interest rates push up stocks
1:45 When people get more enthusiastic about a company, PEs get pushed up

[TheIcelandicInvestor]

If our predictions have been better than other people, it's because we have tried to make fewer of them😆

[SingaporeSkaterSam]

There was a study done asking people to answer some questions with a range they were confident would contain the actual answer. Almost without fail the respondents would provide a far tighter range than necessary to (safely) get a correct answer. Buffett’s comments at the end about degree of difficulty reminded me of this.

[ktube]

What is the best way to profit from the current market, meanwhile I'm still undecided about investing $400k in my stock portfolio to get some dvidends and minimize risk

[davidstevens]

Talking of ratios - look at the thumbs ups to thumbs downs! These 2 are pure gold. Actually in terms of their body weights they're worth a LOT more than pure gold.

[viralmehta]

Love how Buffet puts ice and coca cola in his glass. He loves the product so much

[Ben-qeju]

How long have these two been old?!

What a duo though. Advice/knowledge as sound today as it was 22 years ago.

[zacht.]

I would love to hear them answer this question again today. I would think that the quality of a business plays a huge factor. For example: capital-light, higher margin businesses with higher revenue predictability (especially recurring), tend to warrant higher multiples. Buffett knows this well as he references Philip Fisher frequently. I think some SaaS businesses are arguably the best businesses in the world and are a big reason the average market P/E has increased over the last 25 years.

[Who-cueu]

if a pe ratio is higher (16 and over imo) does the higher pe ratio correlate to a bigger market crash by any chance? I am referring to a total stock market crash, will high pe ratio stocks crash the worst?

[kingiburu]

i have just started my journery with investing. My fathers a CA so hes helping me along this journey but I really appreciate this video. Im broke as hell and its been stressing me out about how im going to invest with so little money. This has boosted my confidence so thank you.

[DenzelLN]

Jesus the ads before and after are nearly longer than the content.

[vidya]

PE/NETROIC = 1
PE is proportional to NetROIC.
NETROIC is the effective driver for PE.

[arts]

decreasing interest rates + increase in corporate proft (roe) of us businesses, +faith in american business. >> increase in p/e all around

[Fjhaha]

Warren realized there is Carema looking at him at beginning so he unwillingly put down his hands searching for speaker lol😂😂😂

[pongfoong]

3d price it me cash around you making mo.for copy a part of all

[romulus]

why does Charlie look like a robot? lol

[wertytrewqa]

The questions at these shareholders meetings are so long. i wouldnt even have the attention span to answer them properly

[adityavishwkarma]

Can anyone explain it in Hindi... ?? Please

[mrretired]

Its called tesla. If you are not invested on tesla before the next bull market then quit investing.