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> Apple's P/E is way to low for a company that literally sells the best and highest rated products on the marke Nobody really cares of this. The price and P/E

> Apple's P/E is way to low for a company that literally sells the best and highest rated products on the marke Nobody really cares of this. The price and P/E doesn't have to do anything with 'how good the products are' (well, not too much at least). What (essentially) matters is risk -- upside and downside risk. Apple looks quite safe at the moment with little upside risk (it's not probable that they'll suddenly double their revenue, but they make a lot of money) and not too much downside risk (very-very little probability of failure, but if something like the iPhone loses its profitability then there isn't really anything else to rely on). Microsoft has exactly the same PE, but it's different. The upside characteristics are the same (not too probable that it's going to grow a lot), but the downside risk is different: Microsoft has many 'legs', it's very unlikely that a large part of their profit just disappears because of losing in one particular market segment, but it's quite likely that they will lose one or two profitable segments

MCRed 12y ago
The P/E is a quick proxy for the bond return. Lower the PE relative to reliable, conservative growth, the better the return. High quality products mean it's unlikely they will release something that shoots them in the foot. Microsoft, on the other hand, is constantly shooting itself in the foot financially -- from their danger based phones to the slate to the xbox (a lot of market share but also a lot of losses.) Thus MSFT and AAPL having similar PEs shows that apple's PE is lower than it should be. People have never believed in Apple, or never "got" it. This is why they thought it would fail without Jobs, they don't understand it. this is why they discount it. When they discount it, as measured by PE, this gives the investor opportunity.

MCRed 12y ago

The P/E is a quick proxy for the bond return. Lower the PE relative to reliable, conservative growth, the better the return. High quality products mean it's unlikely they will release something that shoots them in the foot. Microsoft, on the other hand, is constantly shooting itself in the foot financially -- from their danger based phones to the slate to the xbox (a lot of market share but also a lot of losses.) Thus MSFT and AAPL having similar PEs shows that apple's PE is lower than it should be. People have never believed in Apple, or never "got" it. This is why they thought it would fail without Jobs, they don't understand it. this is why they discount it. When they discount it, as measured by PE, this gives the investor opportunity.