From schweser: a value weighted index may overweight overvaled stocks becasue the overvalued stocks wil have a higher market cap. by weighting by price earnings ratio, there practitioners hope to avoid overweighting overvalued stocks. Stocks with high price earning ratios would have lower weights in such an index. I do not get the last sentence. How can stock with high price earning ratios have lower weights in what index??? thanks

a value weighted index has weights soley based on market cap. Using P/E ratiios normalized the values relative to earnings. Hence an overvalued stock will have a high P/E ratio… all else being equal a lower priced per dollar of earnings is optimal… They should have said they use the inverse P/E to weight… i… E/P ratio…