Compare the tech companies’ P/E ratios in Figure 8-8 with the traditional companies’ P/E ratios. Note that some of the tech companies have very high P/E ratios (a low P/E is good, a high P/E is bad). Some, like Twitter, don’t even have a P/E ratio because they haven’t turned a profit. As a group, list the reasons why the tech companies have such high P/E ratios. Are the prices of these stocks justified given the earnings?

Why?