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To: Paul Shread who wrote (707)8/5/1998 12:16:00 PM
From: mauser96  Read Replies (3) | Respond to of 1999
 
That's a valid point about inflation. Earnings are worth more in low inflation, because less of those earnings are themselves due to inflation. They are also worth more in low interest rate environment which lowers the cost of capital and lowers the return of risk free investments. In the case of rapid growth high tech companies, the earnings often understate the real economic value flowing to the company. See
rcmfinancial.com