I should have known that my dear enemy would take the valuation angle on NYSE Euronext
I, on the other hand, bleed rebellion and sweat hypergrowth, in the Rule Breakers mold. If the opportunities in front of a company are large enough, I don't mind if I can't get a massive discount before buying in. Witness, for example, my newly taken position in Google
That's how I feel about the NYSE, too. The original bull case outlines my reasons for that optimism, blue-eyed or not.
But OK, let's talk valuation a bit anyway.
You can't just drop in a trailing P/E ratio and call it quits if it looks a tad high. On its own, that metric is nearly useless, as are all the relative valuation methods. Earnings don't exist in a vacuum -- they live and (hopefully!) grow, and you have to account for that growth, too.
NYSE is expected to darn near double its earnings over the next year and to grow earnings per share at a compound rate of 28% over the next five years. Closest rival Nasdaq
The one-year estimates put the NYSE at a forward P/E of 22 times earnings, not very far above Nasdaq's 17. Factor in the long-term prospects, too, and NYSE is starting to look reasonable.
The business is there, the tradition helps a bit, and the folks in management have their heads screwed on straight. That's worth a tiny price premium any day. Vote accordingly, Fool.
Fool contributor Anders Bylund is a Google shareholder but holds no other position in any of the companies discussed here. Yes, his eyes are really blue. You can check out Anders' holdings if you like, and Foolish disclosure is always a bargain -- it's free!