A few years ago, you could build a great portfolio, selecting stocks with a current PE ratio of 15 or less.
That time is over. Now, if you manage to find a great stock with a forward PE ratio of 20, first, you'll have to work hard, then, you have to buy it. Because the market is more expensive than that.
You don't have a lot of choices. At this moment, there's a handful of great stocks that are selling for less than 20 times forward earnings. If they're selling for that relatively low price, that's because the sky isn't that clear for them. But it's probably just a momentary problem.
Here's a short list of good stocks which are selling for less than 20 times next year's earnings:
CAN: Canadian National, Canadian Pacific, Linamar, Magna, Alimentation Couche-Tard, CGI, Hardwood Distribution, CCL Industries, Metro.
US: Disney, Mohawk, LKQ, O'Reilly, Omnicom, Credit Acceptance Corp., Discover.
I know, these days, everybody is crazy for those fucking weed stocks. Canopy Growth goes up something like 10% on a given day for no reason. Then, the next day, it goes up 15% and still, nothing happened. And the next day, it goes up 30%. And you say to yourself: "Fuck". And, after a month, the stock is up 100% while your miserable fucking portfolio has done 2%.
I have a friend whom I initiated to the stock market with stocks like Apple, Biogen and Tucows. He still owns some of these stocks but he now gambles with weed stocks. I feel like Obi-Wan Kenobi facing my padawan chosing the dark side.
But it's maybe the inevitable path for growing up. Like we all tasted our pooh when we were babies (some of us still do it). It may be funny for a moment, but you can't live like that forever.