President Obama needs a lesson on the term P/E ratio

brownobama

President  Obama, while sitting with British Prime Minister Gordon Brown today said, “What you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you’ve got a long-term perspective on it.” Obama made the comment while meeting with Prime Minister  Brown about overcoming the global recession.

Give him an A for effort, but this is a real example of his lack of knowledge of the investment world.

Mr. President, Price Earnings ratio is the term you were looking for and it is a valuation ratio of a company’s current share price divided by its per-share annual earnings.

And one last thing,  please don’t get your irritable Press Secretary Robert Gibbs on my case for pointing this out!

gibbs

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