It has everything to do with the stocks here. NPV = Rt / (1 + i)^t. That is where “i” is the discount rate. The net present value of high growth stocks is lower because interest rates are higher. – ajm
A year ago, the LIBOR was 0.28% and now it’s 2.69%. So, that denominator has changed from 1.0028 to 1.0269
THAT has a miniscule effect for growth companies. A sorta big deal for bonds, but minuscule for growth.
Rob
Rule Breaker Home Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
”If you are in the right companies, the potential rise can be so enormous that everything else is secondary. Every $1,000 I and my clients put into Motorola in 1957 is now worth $1,993,846 — after all the ups and downs of the stock and of the market…
If I’d sold Motorola because I thought it was overpriced 10 or 15 years ago, chances are I would not have known when to get back in, and I would have missed a tremendous profit. If one of my stocks gets overpriced, I warn my clients that things may be unpleasant for a little while but it will rise to a new peak later.” Phillip Fisher