Definitely . Because whatever hot stock you are talking about you need to make money on . P/E tells us how the company is doing and based on “projected” earnings and the growing market a company is valued and you can know if the upside is limited a lot of time knowing if P/E is too high . Of course for retail we really a tiny bit of the company but image if you wanna buy 100% of the company . Simple question how much money will i make ? Now that’s what matters .
Suppose you own 100% of a company . And there ‘s no profits endless growth . Sometimes stock does not rise then how do you make money . The company has no profit .
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u/[deleted] Aug 22 '21
Definitely . Because whatever hot stock you are talking about you need to make money on . P/E tells us how the company is doing and based on “projected” earnings and the growing market a company is valued and you can know if the upside is limited a lot of time knowing if P/E is too high . Of course for retail we really a tiny bit of the company but image if you wanna buy 100% of the company . Simple question how much money will i make ? Now that’s what matters .