Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 174.54

-1.2%

3:59 PM EST

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To: Ramsey Su who wrote (28222)	4/24/1999 12:14:00 PM
From: Jim Willie CB	Read Replies (3) of 152472

Ramsey, on PE ratio versus growth a few days ago, posted a message on PE's versus growth... a stock should be considered with much the same pricing dynamics as bonds... lower bond yields increase the principal value of the bond EXPONENTIALLY, not LINEARLY... that is the fallacy of this Radio Klein's formula... the linear rule might hold for a small range of earnings growth rate, but not when it jumps an order of magnitude... he aint no mathematician a stock with a 50-60% growth engine does not earn a PE of 50-60, but EXPONENTIALLY higher PE... perhaps something like 70-80 PE if bonds are not linear, why should stocks be? any mathematical gurus out there? / jim (Ohio Stats)

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