ishkabibble on 10 October 2007
You can quantify the psychology element by using forward P/E. Nintendo is trading with a P/E of 35, which is reasonable for a high growth stock for a company that carved its own market segment. If it starts trading with a P/E of, say, 100... things are irrational and it's probably time to get out.
The aforementioned P/E of 20 (or less) would be appropriate if earnings stopped growing.
