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To: Israel who wrote (218851)	2/5/2003 12:41:55 PM
From: GraceZ	Read Replies (1) \| Respond to of 436258

I use a spread sheet and I use every other tool at my disposal to analyze investments. To assume I only use a spread sheet is a little naive on your part. I do this for a living, I'm a professional. 1)Earnings cannot continue to accelerate at the current rate. (for one, based on weakening economic and industry conditions) And my argument with you was that you can't make this assessment if you don't even know what the current rate of growth is or the rate at which it is slowing. You are guessing. 2)Barriers to entry to this business are not unlimited and therefore much like any growth sector, it will experience heavy competition in the near future. Namely orbitz.com This assumes there is a fixed pie. What size is the market, what is the current penetration of online agents? If the travel market is X and penetration of online services is only a small fraction of X then there is room for competitors and furthermore the competition actually helps to drive customers to all online services. There is little barrier to entry for online auctions yet Ebay continues to dominate. Airbourne didn't put Fedex out of biz, their businesses simply developed a different client base. Maybe Orbitz has a built in advantage, is that built in advantage enough to overwhelm EXPE, maybe. 3)The stock trading at 9 times sales and 33 times next years projected earnings (minus charges of course, if one were to factor out charges the PE would jump to over 100), is priced for perfection. This is nothing but a travel agency with a $4.5 billion dollar market cap. What is the growth rate and what PE is appropriate for a stock with that growth rate in such a low interest rate/low inflation environment? No one seems to be able to answer this question. If you know the PE is too high this assumes you know what the proper PE is, what is it? Historically companies with high growth rates have sported high PEs throughout their growth phase. You can argue that the current market environment won't support such a high PE, but obviously this isn't true because I see a lot of high PEs out there. Don't ever confuse stock price moving over the short term in the direction of your bet for being right. For the most part traders don't care about being right about the fundamental assessment, they only care about making money in the short term. For every single company that went from pennies to a 100 I can assure you there was any number of guys like you scalping points off the short term gyrations in the stock price. If they were interested in being right they'd have gone long and held on like an alligator because that's where the real money is in a high growth company.