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To: garrick le who wrote (36306)	4/1/1998 9:56:00 PM
From: Chuzzlewit	Respond to of 176387

Garrick, you can join the club! I have yet to find anyone that has a reasonable method of valuing growth stocks. And I've been looking for over thirty years, and I do think that gives me the basis for generalizing. You said the following are basic: PE ratio. PE to growth ratio. Stock capitalization to revenue ratio vs growth rate. I disagree. PE is a function of earnings, not cash flow. Furthermore, it is also c function of the general market climate and the perception of risk. So it isn't basic, it is derived. Stock capitalization is the valuation the market places on a company. It is the number a valuation scheme would like to approximate. Si it isn't basic, it is the end point. Growth rate of cash flow is basic it is one of the inputs and total capitalization is the output. So, Garrick, whenever anyone professes that a stock is overvalued or undervalued I challenge the basis for the statement. And your answer is fairly typical. I believe that a stock is worth what a willing buyer and a willing seller agree that its worth. Regards, Paul