Wat betekend nu een hoge of lage P/E:
"One of the things that has scared people away from equities is high P/Es (Price to Earnings Ratio). People have said,
“When P/Es are high, your returns ha
ve to be low.” That's not always true. Where it's not true is in what's called an
“earnings
-
driven” market. There have been many earnings
-
driven markets through time, but it's funny how people
think the only way the market can go up is by interest rates
falling and multiples expanding. That's not true. That's an
interest
-
rate
-
driven market, but there're also earnings
-
driven bull markets. The early 2000’s bull market was an
earnings
-
driven market. One of the reasons people got trapped at the end was t
hat they forget they'd started with a
very high P/E and ended with a low P/E. When you had the low P/E, people said, “Look how cheap equities are.” And
they missed the fact that it was an earnings
-
driven market, and you sell an earnings
-
driven market whe
n the P/E is
low, much like a deep cyclical stock. You buy a deep cyclical stock when the P/E is high, and you sell it when the P/E is
low. That's what we think is going on for the whole economy. That's been our story, that, yes, the multiple is high,
b
ut we think we're entering an earnings
-
driven market. So the bull market will be accompanied by shrinking P/Es."