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URL:  http://boards.fool.com/thats-why-quotpequot-is-a-poor-metric-a-22491646.aspx

Subject:  Re: I am confused. Date:  5/16/2005  12:57 AM
Author:  1poorguy Number:  18386 of 18386

That's why "P/E" is a poor metric. A high P/E isn't necessarily bad if there is growth to back it up, and a low P/E isn't necessarily good if there is no growth.

A better metric (and much more difficult for most to do) is discounted cash flow (DCF). www.valuepro.net does an OK job with this. Their default numbers are good starting points. Sometimes I tweak their discount rate, though as I believe it often is low.

1poorguy
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