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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: Axel Gunderson who wrote (733)	9/2/1998 4:56:00 PM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

in 1972, what were the anticipated growth rates for earnings of the Nifty 50? To the extent that p/e's are an implicit earnings forecast, the p/e on the Nifty 50 at their peak in December 1972 was 41.9. For the S&P 500 it was 18.9. Nearly 25 years later, in June 1997 (which doesn't include the most recent runup), the Nifty 50's annualized return was 12.7%, vs. 12.9% on the S&P. The annualized earnings growth for the Nifty 50 was 11.0%. For the S&P it was 8.0%.

To: Axel Gunderson who wrote (733)	9/2/1998 6:50:00 PM
From: Freedom Fighter	Read Replies (1) \| Respond to of 1722

Axel, >>Several percent, eh? The reason I posed this question is the expectations that CSCO, DELL, MSFT will continue to grow at 25-50% pa, was wondering how the expectations compared.<< By several percent I meant 3%-5% in aggregate. Dell, CSCO, and MSFT sport very high valuations, but when you can grow like that, they are justified. The difference with technology is that it changes so fast that the companies should trade with a higher risk premium. Investment history is littered with fast growing techs that have since disappeared. For techs, the high growth is somewhat offset by the greater risk.