Aug 7, 2025 7:57:54 AM The Myth of the Overvalued Stock Mark Malek High P/Es aren't always red flags–sometimes they’re trail markers. KEY TAKEAWAYS The P/E ratio is meaningless without context High multiples can be justified if growth expectations are strong Mean reversion doesn't always apply to dominant or innovative firms Comparing a hypergrowth company to an index is poor analysis Companies can shift what is considered “normal” valuation in their sector MY HOT TAKES Don’t compare cheetahs to cocker spaniels High multiples are only scary if you don’t understand growth Valuation is forward-looking–and sometimes forever-looking–anything goes Some stocks earn the right to be expensive The market sets the value–but it doesn’t mean it’s right–but that doesn’t mean it’s wrong either. You can quote me: “If a company is dominating its market, that premium isn’t expensive–it’s deserved.”
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