Growth stocks are not overvalued

Following 1998 in which earnings and sentiment suffered from the economic turmoil in Asia, this year has seen a strong rebound. In the recently reported third quarter, S&P 500 earnings were up 20%, the strongest quarter for many years. This growth was driven predominantly by the larger new-economy sectors of technology (up 35%) and telecoms (up 24%), and we continue to focus on these sectors despite their already impressive growth. A clear picture is emerging of a new business landscape developing at a speed unimaginable a decade ago. Looking at those key technological areas that are driv...