P/E is just one signal of many that affects the stock price. You cannot look at it in isolation. For example, the smartphone and tablet market is subject to ch

P/E is just one signal of many that affects the stock price. You cannot look at it in isolation. For example, the smartphone and tablet market is subject to changing trends and quick turmoil. One botched launch cycle from Apple and/or one great launch from one or more of Samsung, Google, Nokia is enough to change things in just one year. That implies risk, and the market does not like risk. Contrast that with well entrenched near monopolies with well erected moats like Google in the web search market, Amazon in the online retail market and Microsoft in desktop software with Windows/Office.