The older investors become the fewer are the years of their horizon. Therefore, in the case of mature investors valuing the price of a stock, the number of years which will be required for a company to earn the amount the investor paid for the stock will be less than that required by younger investors, having more time for recovery of investment.

A company’s current price/earnings ratio is the number of years of the company’s trailing 12-month per share earnings required to equal the current price of the stock.

Many older investors tend to seek investment in lower P/E stocks than younger investors, who believe that EPS will increase over current levels. Older investors are more concerned with loss and gravitate towards debt.

It is possible that increasing geriatric investor presence will influence investment management decision- making and overall stock P/E valuations.

 

Arthur Lipper, Chairman                          arthurlipper@gmail.com
British Far East Holdings. Ltd.