We are in a new age of investing, where you have to pay a premium price for top stocks or miss out on the stocks that have been providing some of the best returns.
This week I looked back to great stocks in the 70s and 80s and looked at their P/E ratios. These were great stocks of their time, growing profits fast, and could have been had for 20-to-35 times earnings most years. This new age we are in now is different as top stocks have P/Es of 60 to 100.
In the past I had been too focused on buying at a discount, but that’s kept me out of some great stocks. Now I see I must pay up to collect top-growth stocks. Own more companies then buy-and-hold them as if I sell high the stock may go higher. Mutual funds take in cash and invest in the top stocks, pushing them even higher. We have to pay up or risk missing out — and not sell when a stock is overvalued. Like real estate, the best investments are more expensive. Great growth has its price.
