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Youxinren's avatar

Hi mr.klement

Another simplifying way of looking at this is a higher risk free rate induces uncertainty very certainly like an Earnings drop. So if the P/E for the entire market or an individual stock is 50 when the risk free rate is low, the E will decline when the 10 yr bond yield moves up , P/E now becomes 75 or 100x assuming E declines by 25%, 50% brought on by the deflationary effect of the higher risk free rate

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Daniel F.'s avatar

Very interesting Joachim. For teh benefit of us, do you have a position for Emerging Markets? We could use this analysis as a benchmark? Any insight?

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