解释一下price earnings ratio anomaly

Price earnings ratio (P/E ratio) anomaly is an investment anomaly that refers to the observation that stocks with low P/E ratios tend to outperform stocks with high P/E ratios over the long term, contrary to what one might expect.

In a normally functioning market, investors would expect stocks with higher P/E ratios to outperform those with lower P/E ratios, as they are perceived to have greater growth potential and higher earnings prospects. However, empirical studies have shown that this is not always the case, and that stocks with lower P/E ratios can often outperform over the long term.

One explanation for this anomaly is that investors may overvalue growth prospects and overlook the importance of value investing, leading to the mispricing of certain stocks. Additionally, there may be behavioral biases at play, such as herding behavior or anchoring bias, that can cause investors to overlook stocks with lower P/E ratios and favor those with higher P/E ratios.

Overall, the P/E ratio anomaly highlights the importance of considering both growth and value factors when making investment decisions, rather than relying solely on one metric.