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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Ryan Bartholomew who wrote (169845)	5/27/2014 3:36:19 PM
From: MGV	Read Replies (1) \| Respond to of 213173

Multiples matter only relative to future earnings, so it's circular reasoning to say that a multiple is low (i.e., a stock is cheap) because your opinion is that the earnings will be substantial relative to the current price. Is your analysis binary and black and white only? If so, then you would never understand sensitivity analysis and relative valuation. The assumptions about the multiples that the market was offering Apple were clear if you built a DCF model and used sensitivity analysis on key variables. The margin for error was very high based on the relative valuation the market was giving Apple. The multiple mattered regardless of forward earnings of 55 or 35, 65 or 25. Whether you consider that a "tremendous investment" is mere opinion. I presume you would agree that gains in Apple over the last 20 months is evidence of whether it was a superior investment or not. Your error is in miscalculating AAPL's forward prospects contrary to the market valuation and in not understanding the alternatives that were available for being long Apple during the term. I can't help you any more than I have in explaining this. If you don't get it, you'll have to agree to disagree. If you don't get it, you should stick with your bearish conviction and add to your puts as Apple has moved from 500 to 550 to 600 to 625.