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To: HeyRainier who wrote (112865)	3/27/1999 1:59:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Rainier, you said As part Value Investor, well, that P/E doesn't comfort me There are major problems using P/E as a benchmark for value. As you are no doubt aware, there are basically two methods of valuing a company: the net asset value (essentially a break-up value) and the PV of estimated future cash flows. The former is irrelevant in a company likely to to grow, and the latter is difficult, if not impossible given the huge levels of uncertainty beyond a few months. P/E is simply irrelevant because it is backward looking and ignores growth, and ignores market conditions. PEG and YPEG are somewhat better because take growth into account growth although they still ignore market conditions (interest rates and general business outlook). I have devised a metric designed to obviate that problem called CNPEG (for Chuzzlewit's Normalized PEG). Basically, you take the PEG for the company under consideration using the mean 5 year estimated growth rate from analysts, and divide that number byt the PEG similarly calculated for the S&P500. The resulting metric ought to be an indication of the relative cost of growth. A number less than 1.0 indicates that growth costs less than the general market. TTFN, CTC