The long-term price-earnings ratio

price-earnings ratio;value premium;arbitrage trading rule;UK stock returns;contrarian investment Abstract:  The price-earnings effect has been thoroughly documented and is the subject of numerous academic studies. However, in existing research it has almost exclusively been calculated on the basis of the previous year's earnings. We show that the power of the effect has until now been seriously underestimated due to taking too short-term a view of earnings. Looking at all UK companies since 1975, using the traditional P/E ratio we find the difference in average annual returns between the value and glamour deciles to be 6%. This is similar to other authors' findings. We are able to almost double the value premium by calculating the P/E ratio using earnings averaged over the previous eight years.

My generation(s): cycles, branding and renewal in E4’s 'Skins'

In an era of fragmenting audience and diversified viewing platforms, youth television needs to move fast and make a lot of noise in order to capture and maintain the attention of the teenage viewer. British ensemble youth drama Skins (E4, 2007-2013) calls attention to itself with its high doses of drugs, chaotic parties and casual attitudes towards sexuality. It also moves quickly, shedding its cast every two seasons as they graduate from school, then renewing itself with a fresh generation of 16 year old characters - three cycles in total. This essay will explore the challenges of maintaining audience connections whilst resetting the narrative clock with each cycle. I suggest that the development of the Skins brand was key to the programme’s success. Branding is particularly important for an audience demographic who increasingly consume their television outside of broadcast flow and essential for a programme which renews its cast every two years. The Skins brand operate as a framework, as the central audience draw, have the strength to maintain audience connections when it ‘graduates’ those characters they identify with at the close of each cycle and starts again from scratch. This essay will explore how the Skins brand constructs a cohesive identity across its multiple generations, yet also consider how the cyclic form poses challenges for the programme’s representations and narratives. This cyclic form allows Skins to repeatedly reach out to a new audience who comes of age alongside each new generation and to reflect shifts in British youth culture. Thus Skins remains ever-youthful, seeking to maintain an at times painfully hip identity. Yet the programme has a somewhat schizophrenic identity, torn between its roots in British realist drama and surrealist comedy and an escapist aspirational glamour that shows the influence of US Teen TV. This combination results in a tendency towards a heightened melodrama at odds with Skins claims for authenticity - its much vaunted teenage advisors and young writers - with the cyclic structure serving to amplify the programme’s excessive tendencies. Each cycle wrestles with a need for continuity and familiarity - partly maintained through brand, aesthetic and setting - yet a desire for freshness and originality, to assert difference from what has gone before. I suggest that the inevitable need for each cycle to ‘top’ what has gone before results in a move away from character-based intimacy and the everyday to high-stakes drama and violence which sits uncomfortably within British youth television.