Forthcoming publication by Keith Anderson

Posted on 10 January 2012

Forthcoming publication by Keith Anderson, The Essential PE: Understanding the stock market through the price earnings ratio (published by Harriman House Publishing, due May 2012)

The PE is the most commonly quoted investment statistic, but few investors stop to think what it really means. For many investors it is a shorthand way of deciding how highly the market regards a company. Investors are prepared to pay many times as much for every penny of earnings from a high-PE 'glamour' stock as for a low-PE 'value' stock. However, academics have known since 1960 that the opposite is true: value stocks outperform glamour stocks consistently over decades. This book opens a window onto the latest academic debates, showing how investors who are prepared to go against the crowd can use financial ratios to improve their investment returns. The scaffolding of accountancy, financial analysis and psychology that underpins the PE is both fascinating to learn about and ultimately profitable.

After completing his BSc in Mathematical Statistics and Operational Research at Exeter, Keith worked for some years as a systems developer, most recently at Deutsche Bank in Frankfurt. He then did an MSc in Investment Analysis at Stirling, where he won the Morley Prize as the top academic in his year. For his PhD at the ICMA Centre, Reading University, Keith showed that different ways of calculating the Price-Earnings ratio could significantly improve investor returns. He worked as a lecturer at Durham University Business School for two years before moving to York in 2008.