Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (43576)	5/19/1998 9:42:00 PM
From: Geoff Nunn	Read Replies (1) \| Respond to of 176387

There is the unwarranted assumption that P/E expansion ought not to take place absent increases in growth rate. This is untrue because it ignores several factors: 1. The decrease in long-term interest rates; 2. The positive money flows into the equity markets from retirement plans;... Chuzz, please explain why are you not guilty of double counting. If the supply of liquid savings into the equity markets increases, that should put downward pressure on interest rates. This of course would benefit stocks. Apart from that, I don't see why stock prices (and P/E ratios) should rise. As you yourself have often pointed out, stock valuations depend upon: expected future cash flow, risk, and the market rate of interest. Unless the increase in savings affects one of these 3 factors, why should stock prices be impacted? What is the separate relationship between savings and stock valuations that you are presuming? Just because retirement savings have increased doesn't mean an investor should pay more for stocks. Does it?