Talk:PEG ratio

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My revision of this page needs someone to champion the "PRO" PEG argument. Any takers?

[edit] The example

The statement "Stock price after 3 years (P/E=15=P/22) = $330/share" assumes a PE of 15, but the long term PE can be different for other companies. I think this is a poor example. Shawnc 09:44, 9 January 2007 (UTC)

It is an historical fact that the average return is about 7.5%, and that the average PE is 15. This example is of a generic company that would abide by the norms. Of course the PE can be different for other companies, but this is because of investor's perception of how much they should pay for growth...exactly what I am trying to show here. For example, consider GE. For decades they earned a higher PE than normal, but eventually they too come to earth. You may argue that regardless of the long term average, the average today is not 15. But that is function of the negligible risk premium over inflation that all assets are demanding today. Something that will revert to the norm over time.Retail Investor 03:08, 10 January 2007 (UTC)