I always see “value investors” talk about some declining company is “undervalued” and “will go up in the long run” because it’s a big company and the P/E ratio is low (McDonald’s, Nike, Netflix, etc.) like they’ve uncovered some hidden gem. However, nobody ever asks why that company has such a low P/E. They dismiss growing businesses as overpriced while holding declining companies and insisting the market is wrong. That’s lazy analysis dressed up as conviction. Isn’t the point of investing finding the leaders in the market and riding along? Businesses with high growth will have a high P/E because they are priced at a premium and will most likely keep going up. Their “undervalued” company might eventually come back, but by that time the market leader has already made thousands of percent in return. A low multiple alone barely tells you anything about a company.