Isn't there a formula for calculating a fair p/e value for our market?
I read it in an introductory share investing book years ago: something like interest rate plus p/e should equal no more than 22 or some figure. This was based on historical averages for our market Can anyone rememeber the exact details?
The logic is that if interest rates are low, the market can support a substantially higher p/e than if interest rates were sky high.
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- Crash Charts 29-87-02
Crash Charts 29-87-02, page-6
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