Valuation multiples exploded upward by 8x, while growth rates crashed - logical?

P/E from 8 to 44, P/S from 0.5 to 4.0 - sustainable?

Valuation multiples crashed 1965-1980, concurrent with higher inflation and interest rates. Then the multiples exploded upward while inflation and interest rates approached zero.

P/E=100/r?

In a way, it seems as if P/E = 100/r, more or less. When the interest rate is high and expected to remain at perhaps 12 per cent for a long time, then the P/E ratio i…