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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Praxis who wrote (5244)	11/8/1998 2:32:00 AM
From: MCsweet	Read Replies (2) \| Respond to of 78825

>Growth in Revenue+ Growth in Earnings= Growth in EPS= Share price >appreciation. A Buffett tenet and all good growth/value investors >rely on this foremost. Steep curves. I do not understand what you mean. If you mean growing earnings means growing stock prices, I of course have to agree with you. If you mean high forecast short-term earnings growth means high stock prices, than I disagree. Often the estimates are wrong or already factored in. MC PS: Contrary to popular opinion, I do not think Buffett is a value investor. Coke (KO) is not a value stock by any stretch of the imagination.

To: Praxis who wrote (5244)	11/8/1998 1:27:00 PM
From: cfimx	Read Replies (1) \| Respond to of 78825

>>Growth in Revenue+ Growth in Earnings= Growth in EPS= Share price appreciation<<< nope- not a buffet tenet and all good growth/value investors absolutely do NOT rely on this formula. This statement might be true: "growth in revenue + growth in earnings = growth in eps." But it certainly is NOT a formula for share price appreciation. What you are missing is dilution. I could grow my earnings a lot if I have a boat load of new capital from shareholders to invest as I see fit. Just putting it in the bank would add to EPS. The question for shareholders and management is "what return can you deliver on the money I give you?" The answer to THAT question might either be a formula for share price appreciation—or depreciation.