Tag Info

New answers tagged

0

As your model is to predict stock returns via P/E, I suggest you try out all possible P/E's in a backtest and select the one with best forecast ability(lowest forecast error).


1

I think you are confusing the goal with the means. The calculation of the PE is not the goal, the true goal is assessing whether a particular stock is an interesting investment opportunity (cheap) under an investment thesis (set of hypotheses). Therefore, there is an infinite number of ways to calculate PE ratios, as a results of a set of different ...


1

I strongly recommend reading an undergraduate finance textbook like Investments by Bodie, Kane, and Marcus. Your methodology may be limited by your data. For example, using forward P/E requires next fiscal year's EPS estimates. NTM (next twelve months) requires quarterly EPS estimates. If you do not have estimates, the best method is TTM (trailing twelve ...


1

"Burn rate" is a measure of "spend rate" relative to cash on hand. So if you have $10 million dollars, and you spend $1 million dollars a month, you will "burn through" your cash in ten months, at which time your company will either "take off," get new financing, or go under. Strategies that rely on "burn rate" are risky ones. Nevertheless, they are ...


3

In the dot.com era the Internet was considered a-winner-takes-it-all market, new tech start-ups (like Netscape, Amazon.com and the famous Pets.com) was measured by how much the capital they where able to chew through, the logic being that the more they spend the more aggressive they were (at least in the investors' eyes), conquering this new market known as ...



Top 50 recent answers are included