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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 243.02-0.7%3:59 PM EST
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To: Bearded One who wrote (101280)4/16/2000 11:36:00 PM
From: Glenn D. Rudolph  Read Replies (1) of 164685
 
The point is, Glenn, there was a *reason* that PE/G of 1 is a good rule-of-thumb. Take the
earnings, compound it by the earnings growth over a few years, and you get a guess as to
the total earnings over that time period assuming constant growth, ignoring inflation. That
was a rough estimate of how much the company could pay back its investors for owning the
stock.


BO,

I understand how this works well. My point is some firms now have exponential growth as compared to linear which makes a five year growth number quite difficult to ascertain.
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