- We’ll first define what a wonderful business should be and what a fair price would be in relation to general stock market risk.
- We’ll look at price earnings differences among sectors and countries to find places to look for great investments.
- A list of S&P 500 companies with low P/E ratios shows that it isn’t easy to find wonderful businesses at a fair price.
Warren Buffett’s main advice to investors is to find a wonderful business at a fair price. Now with the S&P 500 price to earnings (P/E) ratio of 24.34, that implies an earnings yield of just 4.1% which makes me ask myself, is it possible to find a wonderful business at a fair price today?
I’ll first describe what a wonderful business is, look at what would be a fair price for it, and then look to see if there are any such businesses around. More →