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    Question: how come some low p/e stocks that maintain or grow earnings don’t produce anywhere near the results their p/e would suggest?

    @billcody I think you're right, but that's still a huge difference. Let's say a company has 150k in earnings, and goes out and buys a bulldozer for 150k and depreciates it over 5 years. The next year, you're only going to see a 30k reduction in earnings, so it looks like the company had a total...
  2. P

    Question: how come some low p/e stocks that maintain or grow earnings don’t produce anywhere near the results their p/e would suggest?

    @billcody PE doesn't include all capital expenditures. Some industries, like cars and utilities, constantly have to reinvest in their equipment. So Warren Buffet recommends Owner Earnings: https://en.wikipedia.org/wiki/Owner_earnings Maybe it's because capital expenditures aren't flat as these...
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