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 u

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.