Cyclical and turnaround opportunities led in the market waves of —, , arid Arc Price-Earnings Ratios Important? For many years the composite strategy of institutional investors near market tops and bottoms invariably has been wrong. We display the number differently than most statisticians do. They are perhaps the most important fundamental general market measurements, more so than the prime rate charged by leading banks. As cost of equity capital rises into the future, present value calculations become lower because companies must use a higher discounting rate. You don’t own the whole organization.