I was reading a biography of Julian Robertson (Tiger Fund) recently, and in it is mentioned his investment in Ford - with a P/E of 4, and half the market cap of the company in cash. This was in 1987 when the economic outlook was fine going forward. Why can't there be blue chips nowadays that sell for effectively 2 times earnings? Even in 2002/03 I don't recall any major blue chip selling remotely as cheap as that!
because debt is too cheap, if a corporation cost 2x earnings a person/group with sufficient equity could just take over the company and have it fully paid off in 2 years.
There's a lot better information with the media and the internet... if you read Benjamin Graham's value investing book he says you should buy stocks that sell under the companies book value... that type of situation would never happen these days...