The Truth About P/E Ratios! Must Watch for Investors

Have you ever avoided a stock with a very high P/E ratio only to see the price double? Have you also bought a stock because it had a low P/E ratio, only to see the price fall by half?

One of the most common mistakes investors make is to use P/E ratio as a way to value a stock and to make buy and sell decisions. In this video, you are going to learn how P/E ratio can be very misleading and the right way of how to find great stocks that are cheap!
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Stock Investing & Trading insights by Adam Khoo will show you profitable trading and investment opportunities in today's stock markets.

These are essential strategies for stock traders and investors who want to improve their investment and trading performance.

Adam Khoo is a professional stock investor and options trader and the best-selling author of 16 books including 'Winning the Game of Stocks" and "Profit from the Panic". Thousands of students have profited from his sharp investment insights into the world of stock market investing and trading.
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💸 MAY THE MARKETS BE WITH YOU! 💸

[danielrankin]

There's always something to learn from Adam. I find his perspectives have great value.

[outbackenduro]

18:40 "Unrealized profit" Your investing approach is working. Wishing you well in the future.

[Tonitinsood]

Hi Adam, thanks, good video. I though disagree on the free cash flow calculation, as you should take out stock based compensation while calculating FCF as that would be a genuine expense to shareholders.

[KTMNomad]

Adam, you do an amazing job in your explanations. Even veterans of the market like myself enjoy hearing you explain concepts that took a long time to really understand or had to learn the hard way. Thank you for your time and effort.

[relaxingnature]

Mr. Adam can you please make a video how to choose a best broker for investing and trading ❤ And also about which broker you use for trade and investment.❤ It will be helpful for many people whom follow your guideline . ☺️ And also Thank you soo much for sharing with us your precious knowledge and experience 💖💖💝

[sheresepid]

I like your videos, but I think your valuation model is flawed. You are using EPS growth to calculate FCF growth which might not be true. I think it would be better if you forecast all the individual components of CF like revenue, capex, etc.
Anyways, thanks for your videos. There are always something to learn.

[thebigbadwolf]

Great video. The one thing I would like to ask is that in the above example the PEG ratio is still quite high at 22 for CRM. Ideally, I think you mentioned in an earlier video you should not have a PEG greater than 2

[tehbeng]

The stock market values the stocks based on the PE ratio never based on accounts.) If used PE of 10, the co make $ 1 the mkt values the profit as $ 10. So you can see the market value of $ 10 is just a guessing figure. If we used PE of 20 the mkt value become, $ 20. The market value of stocks is actually a scam. Unlike commodities or currencies.

[Ismael-ujfv]

Hi, thank you very much for your video.
I have a question regarding the indicator you are using, what's the name of the P/E indicator you are using?
Thanks

[turtletrader]

I like your videos as they are not only informative but also entertaining. In last 5-10 years if one has invested in FAANG, he doesn’t need a brain to make money. Or if you invest in top 1%, one also don’t need to learn anything. Coming to CRM in last 2-3 years it has gone up then down and up again like several other companies. If i see it fundamental it is least profit making company in last 7 years. If you want to lock people to attend your courses then it is a good video 😂

[Terencethys]

For EPS & PE ratio, what will be the ideal value range to evaluate for the Mag 7?

[bettystiles]

*My friend. I appreciate the time you spend on keeping us informed about the economy. As of today. I count on $15, 000 what do you suggest me to invest in?*

[imirosmanov]

PLTR +99%. Thanks to Adam's recommendation.

[rockyrock]

What I do not understand is why do I have to add them all up if I only bought the stocks at one time and let it compound?

[chiragmehta]

Amazing video. Ty. I never understood these concepts until now. Ty do much

[walter]

Hi Adam, great video but I have one question. Why are you using 7% discount rate?

[limtsekit]

Useful information and great sharing as usual! Proud to be in your community

[beans-ykfg]

Hi Adam, been a fan of you and only you since I ever first laid eyes on your video, can you do a video on Cathy Woods Arkg and Arkk?

[TheMightyMedia]

Hey Adam, pls do a video on Estée Lauder! Thank you

[tomwu]

Salesforce makes frequent acquisitions in order to obtain their high growth rate. The average for the past 10 years is almost $5 billion a year. Should this acquisition cost be normalized and treated as part of Capital Expenditures cost? You added back its amortization, but never accounted for the acquisition costs. Is that the right way to estimate the Free Cash Flow for the future?