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To: Proud_Infidel who wrote (51212)	4/19/1999 12:23:00 PM
From: John Donahoe	Respond to of 164684

RE: In the ST you are correct. However, over the LT, earning matter regardless of what the street currently says in regard to net stocks. These issues are bubbles in search of a pin. Yes, you are right. In the long term earnings matter. However you fail to define "long term". That's the crux of our delimma. How long is long term? The theory of evolution can be used as an analogy. Biological evolution calls for a continuous, almost linear change over a long period. The change is so slow that it goes almost unnoticed. Only after we look back over millions of years can we detect large changes. However there is a alternate theory called "punctuated equilibrium" Which "envisiges evolution as an episodic process occuring in fits and starts interspaced with long periods of stasis....According to their model, new species arise rapidly in small isolated populations. During the explosive phase as the new species emerges the population undergoes rapid morphological change after which it spreads over a wide geographical area and undergoes little further change." (Ref: Denton, Gould and Eldredge on Evolution). Now Gould believes the "punctuated equilibrium" model applies equally to social models as well. He's a Marxist. In the "new economy", if that is what we are in and if the model applies, we could be in the explosive phase of a transition from the old economy to the new economy. And what is happening or is about to happen before our very eyes is "creative destruction" the sine qua non of Capitalism. The "creative destruction" phase can go on for a relatively long time before things get back to normal (i.e. bottom line being more important than top line).