Replies to post #4386 on Electronic Game Card, Inc (fka EGMIQ)

[budge]

remember the massive trailing earnings on all those mortgage companies and home builders a couple of years ago. p/e of 2 was too high.

[SAMNOTSAMUEL]

EGMI - valuation

The assumption is 2009 earning will exceed 2008 by 40%. We are assuming that will happen.

40% growth is not a cake walk long term. This company hopefully will do 40% growth long term.

I suggest that right at this time many expect 2010 earnings to exceed 2009 earnings by more than 50%.

There is no realistic guess for 2011 except higher before tax anyway.

My argument is the market often likes hard numbers. 2010 is all soft numbers. Soft numbers merit a lower future pe.

My contention is $1.60 is not cheap when all the numbers are soft in nature.

I am not claiming $1.60 is expensive though. Stock price potential though is sensitive to news.

If the company performs over time, we may get to $4, $5, $7, $10 who knows.

sam

[SAMNOTSAMUEL]

The finest investing requires sometimes running with the pack and sometimes deviating from the pack.

To buy EGMI in the mid-20 to low-30 was smart deviating from the pack.

If in 2010 EGMI keeps reporting wins and earnings gains and keeps getting rewarded, then running with the pack is smart.

My own guess is this stock will stay below $2 until there is more news. News could be very soon but could be in terms of months.

sam