Consensus seem to say CNBC is noise and pure crap. I choose to say it is what you can pick up from.
Kudos for Dash of insight for aggregating these three interviews. It’s a great summary of folks looking at what matters to them more than all these noise about yields moving higher that this is the end of the world.
All three sources demonstrated a very sophisticated understanding of the relationship between stocks and interest rates. They all note that stock market multiples are actually strongest when interest rates are in the range of four percent.
- Baron emphasizes the importance of stocks in fighting inflation.
- Robbins notes the multiple, stating "When interest rates are between 3 and 7 percent, the long-term history of the market is to trade between 17 and 18 times earnings. With our portfolio trading at 10 1/2, we’ll take our chances."
- Calamos notes, "…if you go back even 50,60 years, when the 10-year bond was 4% to 6%, p/es were 20,which means it’s a much more growth environment.so i think we have to, you know,re-educate investors that, you know, going back to normal rates is not a bad thing."
Larry Robbins – My favorite amongst them. Talks so much about why he does it and effective capital allocations