In this 12-part Cadence Investing Series, we discuss several aspects of the investment process and how it actually works in practice. Topics covered include market psychology and fundamental analysis, and aim to provide the reader with a first-hand view of how financial theory stacks up in real world situations.
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This is the first of our articles on fundamental analysis and we will focus on the price-to-earnings ratio (PE). The reason for focussing on this ratio first is that it is so widely quoted by the broking, investment banking and investment community.
Simplistically, we divide the price of a share by the earnings per share (EPS…
Read the full article at: https://www.livewiremarkets.com/wires/cadence-investing-series-article-5-five-traps-in-using-the-pe-metric