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To: Ditchdigger who wrote (56624)	12/10/1999 7:27:00 AM
From: Think4Yourself	Read Replies (1) \| Respond to of 95453

OT: Internut stock prices are growing faster than growth rates. In Yahoo's case earnings are growing at (67-43)/43 = 56%, a very impressive rate of hypergrowth. The stock growth rate is much more impressive, with about a 130% growth rate since the start of 1997. Yahoo closed yesterday at $340 Assuming stock fails to appreciate further, and they can keep the impressive growth rate, how long before the earnings give a PE comparable to Microsoft's very impressive 61? PE of 61 ==> 340/earn=61 ==> earn = 340/61 ==> earn = $5.57 EOY 2000 = .67 2001 = .67+.67.56 =$1.04 2002 = 1.04+1.04.56 =$1.62 2003 = 1.62+1.62.56 =$2.53 2004 = 2.53+2.53.56 =$3.94 2005 = 3.94+3.94.56 =$6.15 2006 = 6.15+6.15.56 =$9.59 2007 = 9.59+9.59*.56 =$14.96 So we see that IF Yahoo shares don't increase another penny for 6 years and IF they can keep up their phenomenal hypergrowth for six more years, the stock will be valued similarly to Microsoft. Of course, Yahoo already has a large international market, and the competition is getting better/fiercer by the day, so their days of hypergrowth are numbered. There is simply not enough new market out there to go around IMHO. People are so hung up on not missing out on "the next Microsoft" that they they don't realize they have ALREADY missed it. In fact they have overshot the whole runup, and on stocks that might not even be around in 10 years. All that being said, the bigger fool theory is in full force allowing even new investors to potentially make a killing, for now...