Warren Buffett explains the reasons for higher P/E ratios

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Warren Buffett and Charlie Munger explain the reasons for higher price-earnings ratios. From the 1998 Berkshire Hathaway annual meeting.
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Опубликовано:

6 ноя 2018

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Комментарии : 95

@Geotubest 5 лет назад

They really are brilliant. And love Charlie Munger too. Notice how he didn't miss any part of the question asked. They're both on top of everything.

@Discovery_and_Change 2 года назад

0:39 PEs move up because people expect the company to do better than others 1:00 Move up in expected earning power and future returns on equity, and changes in interest rates 1:24 Decreasing interest rates push up stocks 1:45 When people get more enthusiastic about a company, PEs get pushed up

@TheIcelandicInvestor 4 года назад

If our predictions have been better than other people, it's because we have tried to make fewer of them😆

@fp3cr7 3 года назад

I swear to god you're everywhere

@corrySledd 9 месяцев назад

What is the best way to profit from the current market, meanwhile I'm still undecided about investing $400k in my stock portfolio to get some dvidends and minimize risk

@Patatkevin 9 месяцев назад

Well the bigger the risk, the bigger the reward and such impeccable decisions are better guided by professionals.

@sheltonPston 9 месяцев назад

Very true. Despite having no prior investing knowledge, I started investing before the pandemic and pulled in a profit of approximately $950k that same year. In reality, all I was doing was getting professional advice.

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@SingaporeSkaterSam 2 года назад

There was a study done asking people to answer some questions with a range they were confident would contain the actual answer. Almost without fail the respondents would provide a far tighter range than necessary to (safely) get a correct answer. Buffett’s comments at the end about degree of difficulty reminded me of this.

@davidstevens3934 4 года назад

Talking of ratios - look at the thumbs ups to thumbs downs! These 2 are pure gold. Actually in terms of their body weights they're worth a LOT more than pure gold.

@mottykytu 3 года назад

Warren worth more than Diamond I think

@viralmehta7036 4 года назад

Love how Buffet puts ice and coca cola in his glass. He loves the product so much

@Kid_Ikaris 3 года назад

Is Munger drinking wine up there?

@Nile15rush_fj 3 года назад

I would love the product too if i made many billions of dollars off it

@brunomanco7529 3 года назад

Well hes a seller, and hes selling his product

@wizard7314 2 года назад

He's just advertising it.

@Ben-qe8ju 4 года назад

How long have these two been old?! What a duo though. Advice/knowledge as sound today as it was 22 years ago.

@rajshaffir8665 2 года назад

Longer than I’ve been alive, that’s for sure

@josephwhite9628 5 лет назад

They really are brilliant

@zacht.9585 Год назад

I would love to hear them answer this question again today. I would think that the quality of a business plays a huge factor. For example: capital-light, higher margin businesses with higher revenue predictability (especially recurring), tend to warrant higher multiples. Buffett knows this well as he references Philip Fisher frequently. I think some SaaS businesses are arguably the best businesses in the world and are a big reason the average market P/E has increased over the last 25 years.

@theWebWizrd 4 месяца назад

Revenue predictability should warrant some higher P/E (more predictability = lower risk), though it's not obvious that 'SaaS'-style businesses are more predictable (their core services are typically in a hypercompetitive market where innovation is plentiful and new competitors with a great product can quickly make your business extint). I'd say more than anything, though, it is (the perception of) fast growth that pushes a higher P/E multiple. A P/E of 40 or even 30 and a resulting yield of 2.5%/3.3% will never be warranted without growth.

@stockbasics3569 4 года назад

Warren s the best

@Who-cu9eu 3 года назад

if a pe ratio is higher (16 and over imo) does the higher pe ratio correlate to a bigger market crash by any chance? I am referring to a total stock market crash, will high pe ratio stocks crash the worst?

@MrTrap78 3 года назад

I am no expert, but I would say that high P/E stocks generally have high risk. They tend to either do very well or very bad.

@Who-cu9eu 3 года назад

@@MrTrap78 well the higher the pe the higher the bubble so if that sector and i region crashes it will be much worse

@dlwatib 3 года назад

Depends on the reason for the crash. In the C-19 crash high P/E stocks generally were not hurt as bad, did not fall as far and recovered more quickly.

@Oldbong 3 года назад

@@dlwatib do you have any source or general research proving that conclusion? Not that I don't trust you, it would howwever save me from looking through all tickers

@koenpostma912 3 года назад

Yes high pe ratio stocks will crash harder than low pe stocks

@kingiburu2778 2 года назад

i have just started my journery with investing. My fathers a CA so hes helping me along this journey but I really appreciate this video. Im broke as hell and its been stressing me out about how im going to invest with so little money. This has boosted my confidence so thank you.

@tez830 5 лет назад

HERE IS THE KEY TO INVESTING

@arts1902 Год назад

decreasing interest rates + increase in corporate proft (roe) of us businesses, +faith in american business. >> increase in p/e all around

@DenzelLN936 3 года назад

Jesus the ads before and after are nearly longer than the content.

@osandoval4584 3 года назад

Get yourself premium youtube. Best investment you can make if you value your time.

@binitoooo 2 года назад

Get RU-vid vanced. It's free. Only available for Android tho. Speaking of the comment above mine instead of wasting money on premium subscriptions get an android. Open source apps provide modded versions so no premium subscription anymore. Edit: forgot to mention that RU-vid vanced blocks ads on Android. Or for the website version you can get adblock chrome extensions

@vidya014 2 года назад

PE/NETROIC = 1 PE is proportional to NetROIC. NETROIC is the effective driver for PE.

@pongfoong9523 4 года назад

3d price it me cash around you making mo.for copy a part of all

@pongfoong9523 4 года назад

joecracker78 hey dept tor... how s going......

@pongfoong9523 4 года назад

Am just sa game...... dept tor.....

@wertytrewqa 3 года назад

The questions at these shareholders meetings are so long. i wouldnt even have the attention span to answer them properly

@nukefluke 3 года назад

They remind me of Statler and Waldorf

@viethuy903 Год назад

2:20 Buffett and his coke :)

@romulus7739 2 года назад

why does Charlie look like a robot? lol

@madmantrader 5 лет назад

buy apple or ulta beauty

@habibbialikafe339 4 года назад

U were wrong about ultra beauty

@madmantrader 3 года назад

@@habibbialikafe339 not at all the business is doing fine.

@habibbialikafe339 3 года назад

@@madmantrader 1% gains in 2 years with high drawdown and volatility. There are better businesses with better returns and less volatility out there

@madmantrader Год назад

@@habibbialikafe339 up almost 100% in 5 years that’s a good return

@tez830 5 лет назад

Short NFLX.

@saidakhmeev8887 5 лет назад

T why

@JMoney-ne3to 5 лет назад

Absolutely!

@CIA_Is_aTerrorist_Orginization 4 года назад

congrats

@egor.okhterov 4 года назад

These two guys never shorted anything and became billionaires

@justwrapapi 4 года назад

the market can stay irrational longer than you can stay solvent

@Octovisuals 3 года назад

Because it's relative.

@apothe6 3 года назад

Tesla

@JamesToler Год назад

🙌🙌🙌

@mrretired2715 Год назад

Its called tesla. If you are not invested on tesla before the next bull market then quit investing.

@wahyuramadhan195 Год назад

😀😂😂😂

@Fj8282haha 8 дней назад

Warren realized there is Carema looking at him at beginning so he unwillingly put down his hands searching for speaker lol😂😂😂

@adityavishwkarma8745 2 года назад

Can anyone explain it in Hindi... ?? Please

@conors4430 3 года назад

The questioner acting like he’s talking to God

@danielkelly798 3 года назад

He is lol

@tahiranisar2853 2 года назад

ÀRY berukhi

@johndeneen980 3 года назад

They are over priced.

@ronighosh8867 2 года назад

Yes

@ronniedelahoussayechauvin6717 Год назад

There Ansers to questions Sounds So Stupid💯

@pongfoong9523 4 года назад

Hey ....dept tor....how 'ss going...

@TheHellogs4444 3 года назад

Are you high

@mrretired2715 Год назад

Charlie should just stay home

@pongfoong9523 4 года назад

i know business have to belive all about humannibillity you have to belive your work and who r working to?

@shaifullahfirhakim 2 года назад

I want resignation

@exoxy 2 года назад

Do you now

@pongfoong9523 4 года назад

but you see my all album all free and never pay cash that i hope you care .i fect sis had to be my you know .if i didnt post you gonna blind .but i chin you peaking all bluebtooh free me free all

@pranjayarora8115 Год назад

MASTER VISA -(GLOBAL BUSSINESS AVAILABLE IN INDIAN BANKS ALSO)30 PE PAST RETURN HIGH - BUT AMERICAN EXPRESS NATIONAL BUSSINESS PE 15 PAST RETURN LOW -ALL 3 OWNED BY BERKSHIRE HATHAWAY (2) HIGH PE HIGH GROWTH PROSPECT WHY PE RATIO OF ADANI GREEN HIGHER THAN ADANI POWER 💪⚡

@pongfoong9523 4 года назад

post not unpost it doesnt mattar american you chin me allow you .but i fuck ing poor.coss think uncle bill know how to keep it free .