RELATIONSHIP OF INFLATION & PRICE/EARNINGS RATIOS (1900 - 2021)

[Pages:1]Inflation Rate (CPI)

Inflation Rate (CPI)

P/E Ratio

RELATIONSHIP OF INFLATION & PRICE/EARNINGS RATIOS (1900 - 2022)

30%

HISTORY OF INFLATION TRENDS (CPI; left scale) AND THE PRICE/EARNINGS RATIO (right scale) 45

25%

40

20%

35

15%

30

10%

25

5%

20

0%

15

-5%

10

-10%

5

-15%

-

1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

Inflation Rate

Deflation

Inflation

Price Stability

P/E Ratio

AVERAGE P/E RATIO BY RANGE OF INFLATION

20%

SCATTER PLOT: P/E RATIO AND INFLATION (1900 - 2022)

CPI RANGE

BEG

END

less than 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 10.0%

0.00% 0.99% 1.99% 2.99% 3.99% 4.99% 5.99% 9.99% and more

ALL PERIODS (1900-2022)

AVG

AVG

CPI

P/E

-3.8%

14

0.5%

18

1.4%

19

2.5%

23

3.3%

19

4.4%

19

5.5%

15

7.3%

14

13.7%

8

EXCL. LATE 1990s+ (1900-1994)

AVG

AVG

CPI

P/E

-4.0%

14

0.6%

16

1.4%

16

2.6%

16

3.3%

16

4.3%

16

5.5%

15

7.3%

13

13.7%

8

15% 10%

5% 0% -5% -10% -15%

0

5

10 15 20 25 30 35 40 45

P/E Ratio (P/E10)

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