Friday, June 26, 2009

Current PE Ratios Comparison & Buffett's Latest Interview

In a recent interview with Warren Buffett:

On whether he will cash out of Goldman Sachs:
No, no, no. I will keep those Goldman warrants right through their full -- they've got four and a quarter years or so to run. But I think we'll make a lot of money out of those.
On the possibility of the United States losing its AAA Rating:
As long as you're issuing money and you're issuing debt in your own currency, you can print money. The U.S. -- no, I think we will have a AAA for not only as long as I live, but as long as you live, which is more important.

On whether unemployment will continue to rise:
It’s going higher—business has not bounced back. We have not come off the bottom yet. It will work out in the end. Since 1776 it’s been a mistake to bet against America . America solves its problems. How soon, nobody knows. But we have not come off the bottom yet. And it will work out in the end.
On inflation in the United States :
What we’re doing raises the probability significantly of very significant inflation down the road—not this year or next year or the year after that, but we’ve taken actions and they were appropriate actions… it will have consequences and nobody knows exactly what they will be and how effective we will be at draining a system we’ve been flooding, but the probability of significant inflation has gone up.


Bespoke came up with the current P/E ratios for these countries. Please note that its current ratios and not forward ratios. Below is a chart showing these valuations. As shown, Russia currently has the lowest P/E ratio at 6, followed by Italy (10) and France (11). At 14, the US is more attractive based on its P/E ratio than most countries. Taiwan has the highest P/E at 60, and the UK is surprisingly bad at 34. It's valuation is worse than China's. Germany also has a very high P/E ratio at 27. Malaysia's is at a fair 18x.


p/s photos: Reon Kadena


see said...

could bombed out valuations for countries like russia be due to devaluation or default risk?

solomon said...

My opinion is that the unemployment figures will be there for another 1-2 years or longer.

The minute I see corporate profits going up now, I wonder this is a demand pick up or cutting cost measure come into effect especially the staff retrenchment?

Note : Have you changed the first yummy photo? I thought I saw something different.

ronnie said...

Your featuring photos of lovely women is a great idea. It would be too dry just writing on the finance sector without the female form.

King of Red said...

How come your photos all gorgeous..??

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