Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: Bilow who wrote (9094)	11/4/1997 11:51:00 AM
From: Berney	Read Replies (2) of 94695

Carl, I'm enjoining rhe discussion as well and hope that others will jump in. If you look at the S&P 100, it is clearly obvious that most of them have anemic sales growth rates. What they have going for them is fantastic return on equity and the fact that each incremental dollar in revenue has a greater tendency to move to the bottom line. Fixed costs vs. variable costs. As to your last year zero, this year $1.50 example, the key variable is not a one year EPS growth, but projected future (i.e., 5 year) growth rate. From my perspective, it's not an issue of inflation or deflation, as Graham showed that these concepts had no relationship to stock appreciation. The question I'm seeking help on is what you and others believe the long-term EPS growth rate. Is the current 12% sustainable and, if so, for 5 years? Then I'll just let the formula do the talking and we'll see. Berney

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