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Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: John B. Ferris who wrote (7453)	1/10/2000 12:18:00 PM
From: Steven Dopp	Read Replies (1) \| Respond to of 8002

Food for thought... I prepared an SSG on GTW this weekend (which, of course, I don't have in front of me). I used projected earnings and growth rates of 20 percent, which seems reasonable to me. I also adjusted the projected high p/e ratio to 40 and the low p/e ratio to 20. I used $36.50 or thereabouts as my low price. When I did this, my SSg put the stock in the "hold" zone. They buy zone topped out at $50.00. Unfortunately for me, I bought in at $59 1/2. I know the current p/e is well above 40 and has traded at well above the 40 p/e ratio for most of last year. Can anyone justify a p/e ratio higher than 40 five years from now, as is necessary for my SSG to put the current stock price in the "buy" zone? How high do you see the p/e ratio five years hence? Why? The high p/e ratio is what has kept me out of so many technology companies, yet by not investing, I have been missing out on some nice gains.