Quote:
Originally Posted by ErikLS2
Great post there Greg! Do you ever use the PEG Ratio? I always look at the PEG ratio, it really helps figure out which of these high growers is cheaper than the other ones based on their current P/E Ratio and expected growth rate (which is subjective of course). You just have to watch what growth rate is used. I always compare PEG ratios from the same source when comparing them, i.e. don't use the PEG from Yahoo Finance for NTFLX and compare it to the PEG ratio for FB on Schwab for example. I try to keep any buys below a 2.0 PEG ratio. Here is a good explanation of it:
https://en.wikipedia.org/wiki/PEG_ratio |
Erik - I know of the PEG... But when I'm buying this crap I use my gut. Take a NetFlix... I bought when everyone I know is USING it not just when the talking heads are talking about it on TV. I bought Shake Shack because my friends in New York City told me about the lines and the food. I'll be in NYC today and will test this theory myself. I bought Apple years ago after seeing the crowds in their stores at the mall. Went home and bought some.