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Online Share Trading

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P/E Ratio, Newbie

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Not applicable
Gooday Guys, Im new to equity investing and would just like to say, its is great to have forums like these to learn more info on trading, im learning everyday and loving it! Im gonna make my first trade tomorrow:)... I have a question when looking at a shares P/E ratio, what would be the ideal number it should be at, when looking to buy a share? and what other ratio`s or figures should one look at? You input would be highly appreciated Thanks.
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7 REPLIES 7
SimonPB
Valued Contributor
no magic number .. but on the quote page, top right click on Detailed Forecasts and scroll down and you'll fidn the 5 year average. Ideally below the average for the previous five years ..
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Like Simon said. Remember that it's an historic number, even though the price is live, the earnings are up to 6 months old. Having said that, it can be useful to do look at the following relative PEs: Relative to the ALSI Relative to the sector Relative to its own history No golden rule, but be aware of the info you use.
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also check out www.investopedia.com or one of Simon's earlier educational newsletters
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Not applicable
Thank you for the feedback, Much appreciated.
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topgun
Super Contributor
Why worry about the PE if you are going to trade? (As opposed to investing.)
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Well I dont know if this is classified as trading or investing(still starting out) but i plan on growing and saving a nice lump sum, then buying around 5 to 7 shares in my portfolio and maybe selling or taking out my profits every three months as an extra income.
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topgun
Super Contributor
Well, a three month view sounds to me like trading/speculating...PE and other fundamental measures such as cash flows, profitability, gearing and divi yields then hardly relevant. Good luck with the charts...
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