I don't understand this hostility against P/E ratios. This seems...

I don't understand this hostility against P/E ratios. This seems to be a Roger Montgomery phenomenon!

That said, buying company x because it has a lower P/E ratio then company y (in the same industry) is absurd.

Saying that company x is better value than company y (because it has a lower P/E ratio) is also absurd.

Saying a company is overvalued because it has a high P/E ratio is absurd.

But, after examining the facts of the company and assessing its growth potential I have no hesitation in giving it a P/E ratio which represents fair value and I do this regularly.

Massey, if you don't think MCE has any right to trade at a P/E ratio of 17.5 you've done well to sell. I disagree with you though considering the incredible growth potential (due to the industry they're involved in, their increasing market share and the new state of the art manufacturing plant Matrix has built which will double capacity. Also, they are expanding into new products.) Also, the quality of the company and its products are top shelf. And, Matrix does not have high debt and it does have high levels of interest cover. Perhaps we define high debt differently though.

Differences of opinion are what make a market and as much as everyone really likes this company Massey could have done well by selling when he did.