Are current p-e ratios of more concern than interest rates?
I don’t think that is the way to look at it. The proper way to look at it is interest rates will dictate p-e ratios so the lower the interest rates, the higher the p-e ratios. Warren Buffett said it best when he stated that p-e ratios should generally be the inverse of the 30-year bond’s interest rate. So in that context, some p-e ratios are definitely very high, while others are seemingly very low. Q: Let’s hear a bit now from you about the Nevis Fund, which topped Business Weeks July Mutual Fund Scoreboard. What is its strategy — and secret of success? A: If you had to boil down Nevis’ strategy into one sentence it would be that we believe stock performance tracks operating earnings per share. And so if you look at that and you look at any growth company historically, I think you’ll see that pattern whether it is Coca-Cola, Merck, GE, or Microsoft. Secondly, we are looking for companies that can grow for a three- to five-year period at 20%-plus, but we are also only interested in ow
