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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 176.67+1.6%3:59 PM EST
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To: Ramsey Su who wrote (28222)4/24/1999 12:46:00 AM
From: Jon Koplik  Read Replies (1) of 152472
 
Ramsey - just wanted to point out one angle of how the seemingly wrong idea you are ranting about may have some validity. (I would suspect this is not understood by proponents of the dumb idea).

A company growing at 30% is statistically unlikely to actually grow at 30% for all 5 years (because it is just a difficult thing to manage to keep up for 5 years).

Whereas, a company growing at 10 % (still faster than the sales growth rate of "the great" Coca Cola, by the way) would probably be able to keep it up.

So, the 30%, 30 PE stock might become a 20%, 20 PE stock around year 3 or 4 or 5, thus tending to "gravitate toward the mean" (return) (or, whatever that expression is ...)

Jon.
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