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Technology Stocks : Gateway (GTW)

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To: Skeeter Bug who wrote (6486)	8/13/1998 6:15:00 PM
From: Kory	Read Replies (2) of 8002

<kory, did i miss something or didn't gtw only grow 6% tyt last q? if they did then that IS their growth rate. whether they increase it or not is pure speculation. the market normally discounts risk - as opposed to rewarding it.> Whether any company makes a single dollar of profit next year is pure speculation. The country could fall into a huge depression and every single company out there may go bankrupt. The 6% is not necessarily an indicator of where GTW will be next quarter, next year, or in 10 years. They may be at 6%, they may be at 60%, or they may be at a negative 60%. To take one quarter year over year and say this is the growth rate that all investors should use and assume forever going forward is obviously flawed. If I subscribe to that philosophy, since most oil companies have negative earnings growth currently, they will eventually go to zero earnings and stay there as the downward spiral continues forever. Maybe, but I doubt it. As for risk, why is riskier to assume that a 6% growth company will generate growth of 12% next year, than it is to take a 20% growth company and assume they will maintain 20% growth next year? Kory

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