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I was startled last week to see the S&P 500 Price to Earnings ratio (PE) had passed 40. Although we rarely look at aggregate numbers, preferring to focus on individual companies, the figure nonetheless seemed high given our portfolio companies, some of the largest constituents of the index, are still under-valued. As you can see … Continued
While monitoring the 100 or so stocks on our watchlist this week we noticed something interesting. If you categorise the companies by their business characteristics into the five buckets shown below (adapted from legendary investor Peter Lynch), the high growth companies (‘fast growers’) are trading on forward multiples 4-5x higher than the market. Clearly the … Continued
