"Profit's to Earnings Ratio"

republican reporter ^ | Bob Schultz

[jessduntno]

"Profit's to Earnings Ratio"

Posted by Bob Schultz at 3/5/2009 10:04 AM
Categories: uncategorized
 

    Yesterday, President Obama stated, "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,”

    The President was likely speaking to the "P/E" ratio which is used to measure companies against each other.  But P/E ratio does not stand for "Profits" and "Earnings".  It stands for "Price/Earnings".  This is the measure by which a stock price is compared to the earnings per share of that same firm.  

    Hence, a firm that has a stock price of $5/share, and earns $.50/share has a P/E ratio of 10 (5/.50).  Alternatively, a firm that trades at $40, and has profits of $2/share has a P/E of 20.  The lower the P/E ratio the more attractive is the stock price.  

    Obama's gaffe is laughable if it weren't so frightening.  It's indicative of his ability to pontificate on a subject in which he has little or no background or understanding.  

    In fact, Obama's background offers a disturbing vision of how he views America. The majority of Obama's adult life was spent on the South Side of Chicago.  This section of the Windy City is a dichotomy of liberal elites, safely ensconced in their Hyde Park enclave, surrounded by the misery and despair of the Chicago slums. 

[jessduntno]

  While the two neighborhoods could not be more economically diverse, they share many commonalities:

    1. There are no manufacturing firms, or companies that employ a large workforce.
    2. Few if any new businesses are ever opened, in either neighborhood.
    3. The few residents that do start an entrepreneurial venture, quickly move to other locals, where the taxes are lower, and the streets are safer.   
    4.  And, finally, and most importantly,  the residents only see relief and economic opportunity come from the outside - in the form of grants for the University, or government relief for the inner city residents.  

    This final commonality is the most dangerous one, and one to which President Obama seems to have embraced.  Looking at the world through South Chicago eyes has given the President a huge blind spot to the core of America's Economic engine - small businesses.  

    That failure to understand the basic principles that build a business, a neighborhood, a community and a nation offer little hope for restoring America's economic future. 

    His programs and ideas, so far, clearly point to an America that not only turns its back on small business, but drives it from the community.

    America's future can already be seen in a drive through Chicago's South Side;  a place where the difference between "Profits/Earnings Ratio" and "Price/Earnings Ratio" really doesn't matter.

This is just a nightmare...

[Steely Tom]

Profits to Earnings Ratio

What a wanker.

[mwl8787]

The most underrated story of the week. Bush would have been laughed out of town with such a remark.

Hypocrites.

[Vasilli22]

Teleprompter broken??

[Republic of Texas]

The people who voted for this moron are just as stupid as he is, and if they aren’t they don’t care because they are socialists like him. The religion of socialism trumps all.

[Steely Tom]

The only people who’d think so didn’t vote for him anyway.

[DManA]

The profits to earnings ratio has been pretty constant at 1 for quit a while now. If the One can change it that would be nothing short of a miracle.

[anniegetyourgun]

One doesn’t have to understand P/E ratios or anything else about the economy if the agenda is simply to destroy the nation, and in doing so to create chaos in the world.

[alloysteel]

"Profits to Earnings Ratio"

What does that even mean?

Now compare that to my own mangling of the Vulcan benediction supposed bestowed by Spock - "Live well and prosper."

What Spock actually said was "Live long and prosper."

Beam me up, Scottie.

[jessduntno]

Profits to Earnings Ratio
What a wanker.

Imagine if Bush did this...

[gibsosa]

“This is just a nightmare...”

AGREED.

[silverleaf]

if he can tax away the earnings, the profits/earning ratio might slip a tad!

Any chance he thinks the price of a stock is the profit?

[PghBaldy]

Yep- and it was discussed in the WH briefing, with no comment on the stupidity of Mr Expert at Everything, Barack Odingle.

[douginthearmy]

The scary part isn’t that Obama didn’t know what P/E means. The scary part is that he has no advisors who even know what economic acronyms mean nonetheless how the actual economy works.

[jessduntno]

Any chance he thinks the price of a stock is the profit?

Cripes...you might be right...there is no telling...I don't think it was covered in any of the Saul Alinsky books, he really has no clue...

 

[Roccus]

IIRC, he said "...profit and earnings ratio...." proving he not only does not know what the "P" stands for, but has no concept of a ratio.

[jessduntno]

The scary part isn’t that Obama didn’t know what P/E means. The scary part is that he has no advisors who even know what economic acronyms mean nonetheless how the actual economy works.

The other scary thing is that he might end up talking about a P&L as a Profit and Lost Statement and end up being correct...

 

[driftless2]

"bush"

Imagine that comment together with the Obama's shabby treatment of the British P.M.

[Raycpa]

did he make this gaffe with a teleprompter? If so, was it misread or was it the actual text?

[Texas Fossil]

What good is a PE ratio if Obozo nationalizes everything?