(Video length 00:04:59)
In this video, I try to help you to understand risk in the stock market and if the stock market is too high. We use four main measures:
- Enterprise value-to-earnings before interest, taxes, depreciation, and amortization (EV-to-EBITDA)
- Price-to-earnings (PE)
- Price-to-book value (PB)
- Price-to-sales (PS)
Then you decide!
We start with quotes from the greats!
“Risk comes from not knowing what you’re doing.” – Warren Buffett
“Rule No. 1: never lose money; rule No. 2: don’t forget rule No. 1” – Warren Buffett
“Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return.” – Charlie Munger
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