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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: MrGreenJeans who wrote (5955)	7/14/1998 10:40:00 PM
From: mister topes	Read Replies (1) \| Respond to of 42834

Your reasoning may sound good but it is an excellent example of the Theatre of the Absurd coming to investment. If profit growth slows interest rates will decline even further and inflation will this will justify even higher price-earnings ratios as investors pay more for future earnings and dividends by lowering the discount factor to present value and thereby increasing the market multiple for shares. Therefore slowing profit growth is an ideal reason to expect higher p/e ratios and higher common stock prices as a function of these higher p/e ratios. This is how the market works. Unfortunately it appears to be just the opposite of what you thought! But Truman will definitely get it!!