Market Valuation Flashcards
1
Q
What is Warren’s yardstick for when stocks get too expensive?
A
Warren got out of the market twice. The first time was in 1969 when stocks for trading for 50 x earnings. The second time was in 1998. stocks typically trade between 10 and 25 times Earnings. Stocks are trading at 40 or more times earnings, for no other reason than the market is going through a period of mass speculation, it’s time to get out.
