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Strategies & Market Trends : The Amateur Traders Corner

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To: Fundamentls who wrote (525)	8/27/2000 12:20:35 PM
From: Jon Khymn	Read Replies (1) of 19633

I took your 25% growth for 10 years, and then reduced it to 15% for 10 and 10% thereafter While I took only next 10 years, your model take consideration of ALL future earnings. Which would be more accurate. But at 20% discount rate per year, you're actually discounting more than earnings after 10 years. (15% & 10%) I think that's a bit too stiff estimate. Also when you said time value discount, I thought it was for inflation purpose. IF a company's earning are expected to grow 25% every year, 20% discount rate seem to be a bit too high. While KREM's official projection was 25% growth next year, I think they'll grow at around 30% for next few years. (IMO, KREM folks are very conservative. With IPO money, they paid off the loan first. Now KREM doesn't have any long term debts.) Enough on ivory tower calculation stuff. -g- I wasn't even sure how to calculate present value with future expected earnings and inflation. It was a good exercise though. Personally, I would be comfortable getting back in around at $50.

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