Essential P/E

The price-earnings ratio, or P/E, is the most commonly quoted investment statistic, but have you ever considered what it actually means? For most people it''s a shorthand way of deciding how highly the market regards a company, with investors prepared to overpay for earnings from a high-P/E ''glamour'' stock as opposed to a low-P/E ''value'' stock. However, academics have known since 1960 that the...