A few days ago, I was hanging out with a couple of friends and we were talking about their current investments. One of them mentioned a company I’ve never heard of, with a stock price of around 300 dollars apiece. I instinctively said that’s pretty expensive knowing full well that I meant compared to a gallon of milk expensive, it really has nothing to do with expensive or cheap in the retail sense. In the investment world, it’s about whether a stock price is overvalued or undervalued.
This does remind me that time and time again, people keep asking me to talk about sub-1 dollars stocks because it’s cheap and so in this video, we’re going to talk about what P/E and P/S ratios are so that you understand what they mean and how to leverage them to help you identify sound investment opportunities.