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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: Freedom Fighter who wrote (778)	9/16/1998 7:46:00 PM
From: Freedom Fighter	Respond to of 1722

Interest Rates and Stock Prices >>Long term government bonds are yielding less than 1% in Japan at present. Would anyone out there pay 110x-120x earnings for Japanese companies?<< Here are related questions in different forms. Let's assume that stocks are one of many items and assets that are "priced" in an economy. Then the supply of money and credit would have some effect on those prices. Does anyone think it would be possible to increase the amount of money and credit in a financial system by the amount necessary to produce PEs of 110x-120x earnings without causing all sorts of other problems eventually? We can no doubt have interest rates that are anywhere from 2%-4% in a very healthy economy. But can we have enough money to get prices of assets to levels that those interest rates justify at the same time without spillover effects that makes those interest rates impossible or a sign of a credit bubble to begin with? This sort of thought process makes conventional wisdom somewhat suspect. Wayne Crimi Value Investor Workshop members.aol.com