If you've gotten used to paying $20 for a beer at Whole Foods, $5 may seem cheap until you realize the corner shop sells the same beer for $2. Applying this an

If you've gotten used to paying $20 for a beer at Whole Foods, $5 may seem cheap until you realize the corner shop sells the same beer for $2. Applying this analogy to our high inflation environment, those stocks seemed worth paying that high price per dollar of earnings, until the base interest rate started rising. Then you realized you can get the same return that your dividend yield provides by investing in a zero risk CD with no risk of losing the principle. Suddenly those stocks seem way too expensive for each dollar of earnings, and their price keep crashing until that price earnings ratio is something closer to the alternatives that the stock is now competing with.