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Disassembling the PE and PEG Ratios
Retail investors often use the PE ratio as-is, without delving into the variables that contribute to it. Investors need to know why the PE ratio is only half the story, and what's needed for a deeper perspective. Next, the PEG ratio. Why are PEG ratios lower for high-growth companies and higher for low-risk companies? I hope to add a few regressions, but I'm having second thoughts given that the target audience is retail investors. I hope to provide an inside-out understanding of both ratios.