Why not cap stock prices as well. to prevent runups. MAX PE 25

Discussion in 'Economics' started by KINGOFSHORTS, Sep 21, 2008.

  1. Now that shorting is illegal to protect stock rundowns. Why not provide bubble protection and prevent folks from causing stock runups as well. Protect both sides of the house.

    Lets say max P/E cap is 25 earnings.

    So if company A makes 1 buck per share, max price that stock can sell on the open market is 25 bucks.

    Now if next year they earn 2 bucks per share, then the stock can sell for a max price of 50 bucks.

    This will prevent things like internet stock bubbles, solar company bubbles,market crashes etc.. Everything in a more orderly fashion.
  2. vv111y


    In Soviet Russia, Stocks trade You!!