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Biotech / Medical : Sepracor-Looks very promising -- Ignore unavailable to you. Want to Upgrade?

To: David Howe who wrote (2991)	5/25/1999 10:13:00 PM
From: jeffbas	Read Replies (2) \| Respond to of 10280

< you'd have to be pretty simple minded not to understand a stock trading on future earnings in lieu of current earnings.> You would also have to be pretty simple minded not to discount such estimates back to the present time by a VERY HIGH discount rate to allow for the fact that it will be a long time before ANY earnings are achieved and it is quite uncertain what they will be. Furthermore, I would bet anything that in 5 years p/e's will not be anything like what they are now. For example, a discount rate of 50% and a p/e of 30 applied to $10 earnings in 4 years means that $60 is the appropriate price today. The large uncertainties in the earnings and p/e 4 years from now and the enormous price volatility tell me, as an actuary, that a discount rate of something like 50% is definitely appropriate.