10 years later and still the best explanation

sagarsingh1234 - thanks and glad the video helps. I find so much rubbish is spoken about p/e ratios (just the other day two very respected newspapers got it wrong) that I had to post this video. My background as a chartered accountant with 10 years of running financial markets training courses plus 5 years in financial journalism means I am more likely to get it right than many other commentators. Hope you enjoy my other videos.

The way you explain is just amazing! I always knew what P/E ratio was. But now I know in depth. Thank you very much Tim! Appreciate your help!!!

I find I follow the most on your videos when you explain it asking the questions I as an investor should ask. That's what makes it click for me. Other videos do not explain it from the side that my mindset should be thinking... Kudos to an approach that works for me!

Although this is probably 8 years too late looking at the Tesco price this morning the answer to your question is yes. You definitely want to have bought the share price at £4.20! Great videos by the way, I just about watched all of them.

Excellent! Your videos should be proclaimed as a national resource.

This is the best explanation of PE ratio I've seen and heard. Thanks 👍

Very informative videos. Thank for taking the time to visually explain these terms. It makes a huge difference when you see it on a whiteboard.

Fantastic, id love to learn more from this bloke well done fella top lesson

Great job! I just subscribed and look forward to watching all your videos in time.

Tim in a league of his own with explaining this jargon

Wow, This is 12 years ago. Whiteboard is timeless. Thanks 🎉

It is such a relief to see something made for subjects of the United Kingdom rather than American citizens in this genre.

Wow this is the best explanation for P/E

Wonderfully explained! Thank you for posting

Really clearly explained. Thanks!

hand down the best guy on these topics !

Such a good video !! Learning loads !! Thank you Tim Bennett

bloomerstom - a low p/e can indeed indicate trouble, rather than a bargain. It all depends what the other ratios tell you alongside the p/e. For example a low p/e might reflect the market pricing the shares down knowing a firm is carrying a lot of risk (e.g. debt). Some analysts therefore prefer to use Enterprise Value (see video!) multiples rather than purely share price based.

Brilliant video. Thanks Tim!!

amdismat1 - the earnings figure (either an estimated forward number or a historic one) won't change very often. However the share price changes daily, as does the reported p/e ratio. EPS is published for the previous financial year at the foot of the profit and loss account. Cheers, Tim.

Helped a lot, thank you

excellent video, I am doing CeMAP and this was a great explanation.

ty for response and great bids I learnt a lot so far

I'm an A level business student and you explained this wayy better than the text book 😭👍

Well explained video sir, Mr Romero pieto trades on my behalf due to my tight schedules and he is indeed absolutely doing great, my last investment of $5000 he gave me my ROI of $28,380 in a period of two weeks of trading isn't that amazing.

Hi Tim, excellent tutorial, can you explain where i can find the eps on ft site please

Awesome video. Thanks!

thank you sir. wish my commerce teacher explained it like that

P/E Ratio = Understood, Thank you so much Tim

Very well explained and presented. Tesla is a good example of a high PE but investors believing sky rocket earnings

excellent video ,explained very nicely

Before this, I felt I was a beginner after this I am feeling I am an expert :) thank you

What is the difference between Price/Earnings and market P/E? I see both Price/Earning 10.42 and Market P/E 17.

So easy to understand. Thank you!!!

In the lase example. Do inverters expect a increase in dividends or share price?

Watching this while Tesla's PE is close to 500. "Mad ting!" ... according to Caribbean people. Lol

This is very helpful

im not sure if I'm watching the videos to learn or watching you ahahahah

Does this mean to say that a higher P/E ratio suggests greater risk and greater potential return, whereas a lower P/E suggests lower risk and lower potential return? Many thanks.

Hi I have a question, So a low p/e ratio could suggest a bargain but there could also be underlying problems that explain the low p/e ratio. Could you explain if p/e ratio = (price per share/ earnings per share), how would bad news or risk be accounted into either of these two factors, thus causing the p/e to be cheaper? have I misinterpreted this?

Thank you for this. I'm taking the u.s. finra exam and this was very well explained

Thank you!

how do you find how much you earn per share surely it changes everyday and is this related to dividends?

I why is the P/E ratio different when you do price per share/earnings per share Vs Market Cap/Revenue What am I missing?

Are we supposed to use Basic or diluted EPS? And why so?

'To get your money back'-but you get your money back by selling your share! Aren't the earnings the equivalent of interest on your investment?

THANK YOU

Good explanation

SPOT ON

But, but, but... earnings per share don't equal dividends. It's possible, isn't it, that a company could have a great p to e ratio and still not issue decent dividends and that after 5 years of holding onto the shares the share price could be roughly what you paid for it? So, aren't there better indicators to look at before deciding to buy into a particular company? Please forgive my naivety - I'm pretty new to all this.

Is this a VHS recording?

I clicked unlike because the sound quality was poor. Just to respect your hard work I subscribed to the magazine online.

what if the EPS is negative? :)

I wish I had bought and still held tesco shares for £4.20

No way he predicted Boohoo

Great explanation. Not so great audio. Still very helpful overall though. Thanks.

Where on earth did you get 30p? Yearly whatever I didn’t get it clearly

I still have the below misunderstanding: For stock#1211, the PE ratio is over 200. Now stock market price of #1211 is HKD48.2. From your video, it means that we need to wait for 200 years to get the money back. For stock#175, PE ratio is 19. Now stock market price of #175 is HKD4.02. From your video, it means that we need to wait for 19 years to get the money back. For stock#857, PE ratio is 12. Now stock market price of #857 is HKD9.55. From your video, it means that we need to wait for 12 years to get the money back. Question: 1/ From the above stock#1211, 175, 857, which one is worth to buy? From your video, high PE ratio means that it is expensive share and we should avoid buying it. Stock#1211 is the most expensive one, should we avoid buying it? Question : 2/ From your video, low PE ratio means that it is low future growth rate. Does it mean it is not worth to buy? I am confused for buying shares in PE ratio, please fix it, thanks.

Tesla pe is 600

Where do you get 14 times from???? 4.2/30???? So lost on your explanation

What do you mean that you will wait 14 years to get your money back? You don't recieve the EPS back on your investment you get a much smaller amount back, the dividend. Can you help me out here I'm a bit lost.

And to think a share in Tesco as of 2020 is now £234....

I have undertand

Tesla's current P/E is 1600 today.....

'We don't want Rubbish'😂

Non of these rules apply to mega cap tech stocks. Nvidia is 112 !

£4.20? 👀🍁

3:30 - what do you mean by taking 14 years to make your money back?

Tesla p/e 600 😂

Sound sucks, sorry

Adverts again that stop.this casting to.my tv. Fix it youtube. This is rubbish Yet another 1 that ends my tv cast and its still on the first dam video!

Bad lighting and bad sound!

how could ya'll hear him?

Stopped after 1.25 the sound is terrible. Invest in a better microphone.