Does anyone understand what does this mean?
The harmonic mean tends to mitigate the impact of large outliers. It may aggravate the impact of small outliers, but such outliers are bounded by zero on the downside.
You can have infinitely high outliers but the lower side is limited at zero. If your average is 15, your biggest outlier on the lower half is 0. On the upper half it could be 1,000 10,000 100,000 etc. it’s not bound.
I think it refers to the impact of low P/E ratio companies. Since the P/E input goes in the denominator, lower P/E, verses a higher weighting, has a far stronger impact on the harmonic mean.
Outliers are bounded by zero on the downside because P/E should be >= 0. Companies with negative earnings usually won’t have their EPS or P/E reported.