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I am interested in making easy money on the stock market. One of the things I look at is the P/E ratio (the market price
- I am interested in making easy money on the stock market. One of the things I look at is the P/E ratio (the market price of a stock divided by the annual net income). The long-run average P/E for the U.S. stock market is approximately 17 (this would indicate a return on investment of approximately 6%). Currently, West Frazier Timber Co (WFG), a diversified wood products company has a P/E ratio of 2.97 - so very cheap based on this metric.In 2021 its net income was approximately $3B, and yet the entire company can be purchased for $9.1B.Furthermore, the price of lumber is quite high. Here is the price index for lumber over the last 40 years.
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