The Essential P/E: Understanding the stock market through the price-earning ratio

The PE is the most commonly quoted investment statistic, but how many of us stop to think what it actually means? For most people it's a shorthand way of deciding how highly the market regards a company. Investors are prepared to pay many times as much for every penny of earnings from a high-PE 'glamour' stock as for a low-PE 'value' stock. However, academics have known since 1960 that the opposite is true: value stocks outperform glamour stocks consistently over decades.

This book is your gateway into the latest debates, showing how you can use financial ratios to boost your stock returns and run against the crowd. Understanding the scaffolding of accountancy, financial analysis and psychology that underpins the PE is both fascinating and profitable.