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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 681.43+1.6%Nov 10 4:00 PM EST
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To: Casaubon who wrote (40593)2/18/2000 8:31:00 AM
From: KyrosL  Read Replies (1) of 99985
 
it doesn't effect high growth companies with very low or no debt.

While it may not affect very much the earnings of such companies, it certainly affects (or rather should affect) their valuations. You see, a company's value is (or rather should be) the discounted present value of all of that company's future expected earnings. So, rising interest rates greatly reduce that discounted value.

So, in a rational world, rising interest rates should hit high p/e companies' stock much more than low p/e companies' stock.
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