Message Font: Serif | Sans-Serif
No. of Recommendations: 1
As an aside, the more a firm is growing the more important the ROE.
A growing firm with an uninteresting ROE is worth nothing extra
 due to its growth rate, and even a slowly growing high ROE 
firm is potentially worth a lot.
The PEG ratio is misleading, as it conflates growth with
 worthwhile growth.
Rather than growth/PE it should be something more like 
(1+ growth rate above inflation times amount by which ROE
 exceeds the long run median) times
(the amount by which the cyclically adjusted earnings yield
 exceeds Siegel's constant of 6.5%).

As a fun exercise, try this calculation for both Amazon and Walmart.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.