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Stock value: the price/earnings fallacy. (U.S. Market Under the Spotlight).

The investors search to discover a single, simple measure for stock market value appears to have extremityed with the popular acceptance of the price-to-earnings ratio as the arbiter of what constitutes an expensive or cheap market. Major business magazines and media exits frequently quote analysts and market strategists as arguing that the stock market is either too expensive or too cheap depending upon whether the price-to-earnings ratio (PE) upon the Dow Jones Industrial Average is above or below historical inclines

If the PE ratio is above historical averages, this supposedly





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