10.04.06
Valuation velocity
It becomes clear that while investors continue to reward company with strong balance sheet and income statement, the earning acceleration factor is one of the key for valuation, ie. google. The way I think about this, this is sort like physics I learned in high school F=M*A, where upside force is proportional to the size of the company times its speed of earning acceleration. Cash flow continues to be the king of value determination, but the speed of which it increases is where the P/E impact is. So the bigger the company, the faster its quality earning (need to emphasize on quality) accelerates, the quicker its market valuation grows.