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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Thomas M. Carroll who wrote (1219)	9/27/1998 8:44:00 PM
From: Justa Werkenstiff	Respond to of 15132

Tom: Re: "What about the lowering of interest rates ??? Doesn't that have a similar effect on the P/E ratio ??" Lower interest rates mean an expanded P/E. But how high can we really go? We have not seen a P/E above 25 at anytime in history in the US market but for this past summer for a brief moment. So while I think 28x trailing P/Es are possible because anything is possible in a buying panic, I think the probabilities are low. And if we do go to that extreme I will be selling equities at that point. I suspect many on the thread are thinking the exact same thing. The downside risks will outweigh the possibility of gains at that valuation level. Coke shareholders will no doubt confirm this thinking as of this past week.