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To: Steve Yuan who wrote (32170)	1/2/1999 9:19:00 AM
From: Glenn D. Rudolph	Respond to of 164684

At first glance, internuts indeed look very overvalued. However, if you do some calculation, the situation is actually not that bad. Consider YHOO, with 0.7 EPS, P/E ration comes at 350. But its earning growth rate is more than 100%, therefore its PEG is less than 3.5. If you look at CSCO, with P/E at 100 and earning growth rate of 25%, its PEG is 4. Similarly, you will find MSFT and DELL are not cheap at all. Steve, From an earnings perspective, the chances of continued growth in earnings of CSCO, MSFT and DELL are much higher otherwise, agreed. The overvaluation of internuts is related to the overvaluation of the whole equity market. There is a bubble in equity market, not just in internet alone. Some may debate this but I agree completely. Glenn PS If Squid at SI starts to work, you will see this post and a few others. Sheesh LOL.