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Technology Stocks : Xilinx (XLNX)
XLNX 194.920.0%Feb 14 4:00 PM EST
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To: Lucinos who wrote (2318)5/3/1999 9:59:00 AM
From: Charlie Smith  Read Replies (2) of 3291
 
...people have been spoiled by the recent years of booming in the stock market, and the money is pouring into the market at an increasing rate annually. The inflation of stock prices is the by-product of this phenomenon and is becoming a more important factor to
affect the future PE of stocks.

PEs increased because inflation fell from 3% in 1996 down to 1% today. You've got cause and effect mixed up. Money flows in because fundamentals improve, not the other way around.

You can be certain that if inflation had jumped from 3% to 5% during this period, stock prices would have rapidly gone the other way, money flows notwithstanding.
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