[Delphin]

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I get what you guys said because I said most of it in my first post.

"What investors hope will happen is that GOOG's earnings will quadruple, and its share price will double, leaving it with a PE of 40."

If their earing quadruple wont tons of people be in on the stock and the PE will be much higher than 40?

My first question was why do stocks with with high growth projections have a high PE? Is that because mosts stocks that are growing normally just have small earings because they are just starting out and many people are just buying it to get in ont the stock cauing the PE to go up?

I'm just not getting WHY high growth stocks generally have a high PE.

P.S. I know PE is not constant.

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Basic economics. The price depends on the demand. Lots of people want to buy stock in a company that is projected to grow quickly. They bid the price up higher. As the company grows and it's future projected growth starts to cool off, there is less demand and the price stops growing as rapidly. The company is still growing, but some investors start looking for companies that are growing faster, this means that less people are buying the stock and the price doesn't continue to go up as rapidly.