Hacker News Reader

P/E ratio of almost 40? Seems crazy to value the largest tech company in the world at a price where you wouldn't see your money back for 40 years. Do they really have enough room to grow to offset that? Seems unlikely to me, but then again you don't see me shorting it :)

View on HN

P/E ratio is irrelevant these days, they can just do buybacks. Then they never need to pay dividends. If people want to cash out, they can just sell their shares back to Apple. It's more tax efficient too (capital gains instead of income tax). This can work even if earnings were 0.

You're thinking about this wrong. P/E 40 is comparable to an interest rate of 2%. Would you rather take 0% from bonds?

Only if you expect that the company can survive 30 years at the current level.

Reply on news.ycombinator.com