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For everyone who is having trouble averaging "PEs" after the (excellent) summaries by DTM, just switch to earnings yields or "EPs" and you're going to find yourself in a much more logical place.

Two stocks at 10x and 20x (PEs) become 10% and 5% respectively when looking at EPs.

The "average" of 10% and 5% is 7.5%, or a 13.33 PE. Probably more intuitive for most of us.

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