Apple, Sui Generis -- Monday Note

Value different...

"Apple is the most successful Consumer Electronics company ever. Obscenely profitable, money flowing from every orifice of its operations. But investors — Warren Buffet calls them “traders” — put more faith in Google and Microsoft than in Apple. The difference in expectations is crisply summarized in Price Earnings Ratio (P/E): Divide a company’s share price by Earnings Per Share (EPS) and out comes the P/E number.
Apple shares traded at $216.16 this past Friday; over the past 12 months cumulative EPS was $11.03 (I checked company documents). This yields a P/E factor just shy of 20. In other words, the market is willing to pay $20 for $1 of Apple earnings. The P/E for Google and Microsoft is about 50 (see the YCharts site for more P/E history). Traders are willing to pay more for $1 of Google or Microsoft profits because they think these companies offer a safer future than does Apple. It’s an insurance calculation."

Apple, Sui Generis  --  Monday Note