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Re: Jimmy Humphrey post# 20883

Wednesday, 04/15/2009 8:53:12 AM

Wednesday, April 15, 2009 8:53:12 AM

Post# of 83044
Jimmy,

It has already been written but I'll try to elaborate further. Most companies' share prices are a multiple of their earnings. If I promised you $1 per year in earnings for 25 years, the stock price should theoretically be the present value of the $25 dollars.

You are only looking at the first dollar. Another factor is the potential for growth. A company earning $1 today may be able to expand their operation and earn $2 later. The potential for growth makes the multiple greater. Most larger mining companies that cannot grow very fast and trade at a multiple of 10 times their one year earnings. I think CPRK will trade much higher than that because of their growth potential.

F18

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