Would you pay 5 million dollars for a business that makes only $100,000 a year? That's what a 50:1 P/E Ratio is about. Take Google (GOOG), the number one search engine that carries that heavy ratio. Are you willing to wait 50 years to break even? Do you have a crystal ball that ensures some competitor doesn't diminish market share or that technologies will not change?

Google is not unique. There are many other companies in the marketplace with these huge P/E Ratios. When the economy goes thru its cycle and slows down, will the premium hold up? Most will not want to pay that premium me thinks from past experiences.

When the economy slows down how do you protect your portfolio? One answer is dividend paying low P/E  stocks. These companies have strong balance sheets and make continuous dividend payments.