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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Goldbug Guru who wrote (18889)	5/27/1999 12:17:00 PM
From: Dennis J Baltz	Read Replies (2) \| Respond to of 41369

Goldbug I agree with your statement "Never listen to a P/E man". Having a MBA in Finance from SUNY, I just shake my head when I see someone on CNBC comparing the P/E of GM vs AOL. This just means these people are clueless about stock valuations and anything they say should be disregarded. People purchase stocks because they believe the stock price will increase in the future. P/E is a measurement of the PAST. Future earnings growth is what is what stock prices are based on and this needs to be a key factor in any valuation. As I mentioned before: $100,000 compounded at 8% a year (GM's growth rate) will return $215,892 after 10 years. $100,000 compounded at 100% a year (AOL's growth rate) will return $102,400,000 after 10 years. Comments made on CNBC on PE's can only affect AOL's stock price for the short run. In the long run, earnings growth will always win over Bullsh--.