S&P CNX NIFTY INDEX FUTURES forum

Lately, some companies in India and globally have P/E ratios in 3 digits — and in rare cases approaching 4 digits. Yes, that’s correct: 1000+.
Let’s break this down:
📌 P/E = Price / Earnings
A P/E of 1,000 means it would take 1,000 years of current earnings to recover your principal investment — ignoring growth, inflation, dividends, or risks.
If a company is trading at a P/E of 16,000, as we see in some small‑cap cases, you’d have to wait… roughly 480 generations (assuming one generation ≈ 33 years) to recover your investment purely from profits. That’s not investing — that’s speculation on hype.
💡 Is this healthy?
For large, proven growth companies (think Amazon, Microsoft, Tesla), high P/E can be justified by decades of sustainable revenue growth.
But for smaller companies without proven earnings or durable competitive advantages? This is risky territory. Valuations at these levels often rely entirely on hope and momentum. That’s where bubbles form.
🔍 Reality Check:
High P/E doesn’t mean a stock is automatically bad — but extreme P/E is a warning sign. History shows that markets correct sharply when expectations aren’t met.
📊 A safer alternative?
Look for companies with low P/E ratios, strong cash flow, and sustainable growth. These are more likely to give steady returns rather than chasing speculative waves.
⚠️ The question every investor should ask:
“Do I believe in this company enough to tie my money up for decades without guarantees?”
📌 My takeaway: Extreme P/E ratios are rarely healthy — especially in speculative markets. Be mindful, do your homework, and avoid chasing bubbles.