Paul L., Hi Paul, you can't totally dicount price for when people will actually make a commitment to a stock. Sometimes, a price below a certain threshold allows people who otherwise would not have invested to buy. Also, some investors don't look at PEs , just absolute price, i.e. buying CPQ vs Dell simply based on price. I don't think we can know what this threshold price is but historically, I think research indicates that a stock does run up after announcement of a split. Whether this is due to increased confidence in the company or increased buyers because of price, I don't know.
On inflation, I forgot to mention, in agreeing that it doesn't necessarily result when full employment is reached, that this current scenario is contingent upon the dollar retaining it's strength.
Regards,
Lee |
