Is Price Earnings Ratio a Good Measure of Stocks?

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Oct. 15 (Bloomberg) -- Tobias Levkovich, chief U.S. equity strategist at Citigroup, compares market outlooks for Europe and the United States and using price earnings ratio to measure stocks. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

This year.

If you examine for fundamental reasons, there is a cyclically adjusted price listing of global markets.

European markets the cheap, japan and the u.s. look like they are on the high-end.

But certainly, you have a survey on that heard certainly we did hurt europe has been the favorite region for the first time in seven years in the survey.

I would be a little bit questionable about how you think about the multiples of a different markets, because it constituencies a different.

In the u.s., 16% of the s&p 500 is technology.

In the uk it is one percent.

There is a much larger financials component.

You have to be a little bit careful about the composition of those.

This is robert schiller's course here.

He's going to be on the show later.

Is a price-earnings ratio a good metric to make money?

It is.

We look at what has been the best place to buy the market.

Actually, you're in the second best place in the 14 to 16 range in terms of one year performance.

You can back test this and see what works.

The only difference i have with professor shiller is the numbers are used.

If you use s&p numbers, they have a different composition than id i asked us which is the more generally accepted wall street view.

It is a twofer numbers are meant to different results.

On average usingibis is average.

If you use s&p you are well above average.

I think s&p's numbers are not as good.

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