GuruFocus Premium Membership

Serving Intelligent Investors Since 2004

Try It 100% FREE for 7 Days!

Kenneth Fisher: Surviving Rate Rises

June 04, 2006 | About:
Should you fear rising long-term interest rates? The ten-year Treasury, which started 2006 at a 4.4% yield to maturity, now hovers near 5.1%. As I have been arguing for a while, the bullish case for equities hangs to a large degree on the fact that corporate share purchases--in the form of either cash takeovers or stock buybacks--have the effect of boosting earnings per share of the company buying the shares. And this phenomenon, in turn, depends on the fact that long-term interest rates are low. A chronic upward trend in long rates would do a lot of damage to stock prices.

Read the complete column

Rating: 1.6/5 (8 votes)


Please leave your comment:

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership