Goldstein On Gelt

Does the price of a stock really matter? Many people look at the price of a share before deciding whether to buy that particular stock.  Should you follow your instinct and consider the price of a stock before deciding whether to buy it or not?  When buying a stock one of the factors that one needs to take into consideration is the PE ratio, the price per-earnings ratio of the company. The PE ratio is the calculation of how much a company earns divided by the price of the company. Listen to today’s episode to learn how to calculate a company’s PE.   Once we understand why people are willing to pay 10, 30, or even 400 times earnings, ask why should someone do that? If I can pay a cheaper price for a similar stock, why should I buy the more expensive one?  The answer is different people look at  stocks differently. Beauty is in the eyes of the beholder; what is important to one person may not be as important to someone else.  The most important thing to keep in mind is that if the PE ratio is very d