Deewar:
There are only two types of relevant (to investing) PE's - Present and Future. You seem to be trying to invent some kind of hybrid PE.
Future PE is based on TODAY's price and TODAY's shares OS at TOMORROW's earnings.
Present PE is based on TODAY's price and TODAY's shares OS at TODAY's earnings. It is irrelevant what the PE was two months ago based on the price and shares OS and earnings at that time. The equation changes every time the earnings or shares OS or price changes.
Suppose a company doubled their OS shares during the quarter, their PE would be twice what it was. The only way it wouldn't be would be if those shares went to buy another company. If so, you could add their earnings into the equation. But, in lieu of that, your PE is double. Now, your FORWARD PE may, theoretically, even be less than today ... if the doubled shares OS were somehow going to give them the ability to more than double their earnings in future quarters.
But, in lieu of increasing earnings TODAY, increases in shares OS automatically decreases the present PE. There is no way around that. HWeb and Guy are right and, to be honest, I didn't know anyone thought anything to the contrary.
Len
Warren Buffet: 5 minutes and 17 seconds of pure, unadulterated, bulletproof, flawless logic.
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