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Technology Stocks : All About Sun Microsystems
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To: Prognosticator who wrote (42064)3/15/2001 6:06:40 PM
From: Mike Ankley  Read Replies (1) of 64865
 
Prognsticator:

At which point the P/E ratios of all companies tend towards the reciprocal of the current interest rate

So using Japan as an example, their interest rate is 0.15% = 0.0015, with a reciprocal of 10000 / 15 = 666.66

So you would have us believe the appropriate PE for Japan stocks is 666.66????

And yet stocks continue to slide there, huh? Go figure?

Also check out Fed rate cuts in 1929-1931. Back then, Fed cut rates, yet stocks continued to fall ... kinda like Japan right now, kinda like here in U.S. right now.

Must be a small flaw in your theory.

LOL!
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