P/E a little bit high for me, even for growth stocks.
Let's see in one year who was right.
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Originally Posted by Joe Magyer
3. Avoid sky-high valuations
It doesn't take a battle-worn market guru to know that stocks with sky-high valuations have much further to fall. It is easy to get swept up in the greed-induced euphoria offered by a MercadoLibre (Nasdaq: MELI) or Solarfun (Nasdaq: SOLF)-like situation. Because they're trading at stratospheric valuations, though, the reality is that those companies' enviable expected hyper-growth is already baked into their shares. When these high-growth, high-priced companies slip, they fall hard, and investors like us are usually the last ones holding the bag.
Go to Vegas if you want to gamble. If you're serious about limiting your losses, don't overpay for growth when attractively-priced dividend payers such as SYSCO (NYSE: SYY), Waste Management (NYSE: WMI), and McGraw-Hill (NYSE: MHP) are sitting in plain sight.
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