Price-Earnings Ratios

WITHIN THREE TO TEN YEARS, will the better price performance be in common stocks, with the current price earnings multiples of over 25 times, or in those under 12 times? Answers to this question as posed to sophisticated Financial Analysts and business men, in the past year, have been nearly ten-to-one in favor of the high multiples. It is assumed they are bought for growth, and the low multiples only for income. The results of certain studies, covering data for past years, would indicate a contrary conclusion; i.e., that on the average the purchase of stocks with low priceearnings multiples will result in greater appreciation in addition to the higher income provided.