MauDib

The Average Stock Is Now Very Cheap

If the earnings stay in the business, those earnings continue to be at risk. Thus, in the coming years when the business becomes stale and loses its competitive edge, its moat around its business recedes, will the trustees for the owners grab the money and run? Like, GM, Enron, Merrill - what is human nature?

So, the risk/reward is not there for a p/e of 9-10. You can buy a stable utility for that p/e. So, as a goup, small caps are not cheap at those average prices - while individual stocks at the start of their growth cycle may be worth much more.