Valuation Methods and PE Selection
“PE is historical data, a rearview mirror; it cannot serve as a standard for whether to invest.”
💡 Key Quotes
- “PE is historical data, the price-earnings ratio is a rearview mirror; it cannot be used as a criterion for whether to invest.”
- “The appropriate PE multiple is related to average long-term interest rates; a long-term PE of 12 should be acceptable.”
- “Having this thought shows you don’t yet understand the company.” (When asked at what PE level one should stop buying)
- “I’d rather be vaguely right than precisely wrong.”
- “If an investment requires using a calculator for a long time just to calculate a tiny profit, it’s better not to invest.”
❓ Q&A Selection
Q: Generally, above what PE multiple should one not buy? A: Having this thought shows you don’t yet understand the company. For example, back when NetEase was still losing money… (2013-03-26)
Q: Do you refer to the price-earnings ratio when buying stocks? A: PE is historical data of the company; it has reference value, but to understand the entire company, PE is not enough. (2010-03-14)
Q: What does “PE is historical data” mean? A: It means you cannot rely solely on PE to predict the company’s future earnings, or you will fall into a trap. For instance, GM (General Motors) always had a very low PE (around 5x in the past), but its debt was very high, and it eventually went bankrupt. (2010-04-04)
Q: “The price-earnings ratio is a rearview mirror” — how should we understand this? A: The PE ratio is a rearview mirror; it cannot be used as a standard for whether to invest. The key is future earning power; if you don’t understand it, don’t touch it, no matter how low the PE is. (2019-09-16)
Q: What PE multiple is reasonable? A: The appropriate PE multiple is related to average long-term interest rates; a long-term PE of 12 should be acceptable. I generally use around this number myself. (2011-01-05)
Q: What do I usually mean by PE? A: Never be misled by PE, because PE is historical data and may not represent the future. When I talk about PE, I usually mean the PE relative to future long-term actual profits, not the PE found on typical financial reports. What PE you are willing to give depends entirely on your own ability or your own opportunity cost of capital; it actually has nothing to do with the market. (2011-10-01)
Q: Suppose a company currently has a PE of 30, but the average growth rate of its profits for the next 30 years is 20% per year. Is this company expensive? A: Suppose a company currently has a PE of 30, but the average growth rate of its profits for the next 30 years is 20% per year. Is this company expensive? (2012-07-11)
Q: What does PE=10 mean? A: PE=10 means it will take 10 years to earn back the share price. If you want to buy it, you must believe that the average annual profit over the next 10 years will reach or exceed the current annual profit. (2010-03-10)
Q: How do you value a company? A: I have never seriously estimated a so-called “intrinsic value” range. Before selling most of my NetEase shares, my thought was: the future cash flow discount of this company is far greater than its market value at the time, so I won’t sell. (Investment Logic)
Q: What if an investment requires using a calculator for a long time just to calculate a tiny profit? A: If an investment requires using a calculator for a long time just to calculate a tiny profit, it’s better not to invest. (Investment Logic)
Q: “I’d rather be vaguely right than precisely wrong” — how to understand this? A: (Citing Buffett) I’d rather be vaguely right than precisely wrong. This is the best annotation for Rough Estimation — no need for precise calculation, just judge whether the general direction is correct. (Investment Logic)
💡 Duan Yongping’s Valuation Framework
- Don’t use PE, use future cash flow discount: PE is historical data; discounted future cash flow is the correct way of thinking.
- Rough Estimation: No need for precise calculation; a rough judgment is enough.
- 12x PE as a reference: For stable and mature companies, 12x PE is a reasonable reference line.
- Opportunity Cost: How much PE you are willing to give depends on your own opportunity cost of capital.
🔗 Related Notes
Related Concepts 未来现金流折现 · 毛估估 · 安全边际 · 能力圈 Related People 段永平 · 巴菲特 Related Themes 如何给公司估值 · Duan Yongping’s Value Investment System
估值方法与PE篇精选
💡 核心金句
- “PE是历史数据，市盈率是倒后镜，不能作为能不能投的标准”
- “多少倍PE和平均长期利息有关，12倍长期PE应该可以了”
- “有这种想法就说明你还不懂公司”（被问到超过多少PE不应该买入时）
- “宁要模糊的正确，也不要精确的错误”
- “如果需要计算器按半天才能算出来那么一点利润的投资还是不投的好”
❓ 精选问答
问：一般市盈率超过多少倍不应该买入？
答：有这种想法就说明你还不懂公司。比如网易当年还在亏钱的时候…。（2013-03-26）
问：买股票会参考市盈率吗？
答：PE是公司的历史数据，有参考意义，但要了解整个公司靠PE是不够的。（2010-03-14）
问：PE是历史数据是什么意思？
答：PE是历史数据的意思是你不能单靠PE去推测公司未来的收益，不然会中招的。举个例子，GM（通用汽车）的PE一直都很低（以前老在5倍左右），但债务很高，结果破产了。（2010-04-04）
问：市盈率是倒后镜，这句话怎么理解？
答：市盈率是倒后镜，不能作为能不能投的标准。关键是未来的盈利能力，看不懂的再低也别碰。（2019-09-16）
问：多少倍PE是合理的？
答：多少倍PE和平均长期利息有关，12倍长期PE应该可以了，我一般大概也用这个数左右。（2011-01-05）
问：我说的PE一般指的是什么？
答：千万不要被PE误导，因为PE是个历史数据，未必能说明未来。我说的PE一般指的是相对于未来长期实际利润的PE，不是一般财报上的那个PE。你愿意给多少PE完全取决于你自己的能力或者说你自己的资金的机会成本，其实和市场无关。（2011-10-01）
问：假设有个公司现在市盈率是30但未来30年每年利润的平均增长率为20%，这个公司贵吗？
答：假设有个公司现在市盈率是30但未来30年每年利润的平均增长率为20%，这个公司贵吗？（2012-07-11）
问：PE=10意味着什么？
答：PE=10意味着要10年才能赚回股价，如果你想买的话，你必须认为10年内的平均年利润要达到或超过现在的年利润。（2010-03-10）
问：如何给公司估值？
答：我从来就没认真估过所谓”内在价值”的区间。在卖出大部分网易之前，我的想法就是：这家公司的未来现金流折现远大于当时的市值，所以我不卖。（投资逻辑篇）
问：如果需要计算器按半天才能算出来那么一点利润的投资，怎么办？
答：如果需要计算器按半天才能算出来那么一点利润的投资还是不投的好。（投资逻辑篇）
问：宁要模糊的正确，也不要精确的错误，这句话怎么理解？
答：（引用巴菲特）宁要模糊的正确，也不要精确的错误。这是对毛估估最好的注解——不需要精确计算，只需要大致判断方向是否正确。（投资逻辑篇）
💡 段永平的估值框架
- 不用PE，用未来现金流折现：PE是历史数据，未来现金流折现才是正确的思维方式
- 毛估估：不需要精确计算，大致判断即可
- 12倍PE作为参考：对于稳定成熟的公司，12倍PE是合理的参考线
- 机会成本：你愿意给多少PE，取决于你自己的资金机会成本
🔗 相关笔记
相关概念 未来现金流折现 · 毛估估 · 安全边际 · 能力圈 相关人物 段永平 · 巴菲特 相关主题 如何给公司估值 · 段永平的价值投资体系