I don't want to run in to a discussion on economic theory, but P/E has to be taken with a pinch of salt when looking at large firms.
Risk is the important thing for investors, P/E is normally a measure of value vs Growth expectation, but the Price will always be waited by the risk.
No matter how you cut it, people expected something from Apple with the stock valuation of last year. People are worried there is a trend of Apple loosing its ground, even loosing its after sales prodcuts things like music for example for Spotify.
I'm not suggesting that everyone assumed explosive growth, and $1400 a share by 2014, just that share prices are based on future expectation, not present state.
People (well the market) obviously that to be something more than they do now.
Comments
I don't want to run in to a discussion on economic theory, but P/E has to be taken with a pinch of salt when looking at large firms.
Risk is the important thing for investors, P/E is normally a measure of value vs Growth expectation, but the Price will always be waited by the risk.
No matter how you cut it, people expected something from Apple with the stock valuation of last year. People are worried there is a trend of Apple loosing its ground, even loosing its after sales prodcuts things like music for example for Spotify.
I'm not suggesting that everyone assumed explosive growth, and $1400 a share by 2014, just that share prices are based on future expectation, not present state.
People (well the market) obviously that to be something more than they do now.