Browse Stacks: Business: Inflation: inflation vs equity valuations

inflation vs equity valuations

Inflation has little effect on stock market valuation. 

Read more: http://www.businessinsider.com/700-years-of-data-in-12-must-see-charts-2013-10#ixzz2iZCCIsON

Comments

MILESCFAMILESCFA
That is EXACTLY WRONG. Notice how it looks like a mountain? OR an upside down Y... rotate it 90 degrees clockwise and you have CrestmontResearch's Y-curve, which says the skt mkt does NOT like high inflation or low inflation (AKA DEFLAtion). You only get BIG PE's when inflation is low (around zero) and NOT VOLATILE... see http://www.crestmontresearch.com/docs/Stock-Inflation-and-PE.pdf 10/23/13
MILESCFAMILESCFA
PS: All the Bears around Slope have constantly been wrong but not without good reason. The mkt SHOULD "collapse", because with so MUCH MONEY being pumped in, INFLATION SHOULD EXPLODE. Why the theory fails is that the economy is basically weak, so no one wants to borrow and the money sits in the bankers FED acct (which now pays interest, thx Ben). The minute this money starts flowing into the economy, the house of cards comes down. That's why I'm hoping Obama and Been (now Yellen) will get the recovery they actually desire, because they actually deserve it. Sadly, it will probably NOT come until the Republicans win the Presidency, or take total control of Congress. Here's for Hoping! :-) 10/23/13
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