why would you buy stock at a premium unless you're buying put options?

Apple isn't selling at a premium though. It has a pe of < 12 when you take out the cash. I agree that things go down when expectations aren't met, the thing is the expectations don't make any sense at all.

Apple is the only company in the world that could grow 54%, have a pe of 12, and still go down.

@clarky07 exactly. Apple's PE is unbeleivably low. if you put Apple on the same PE multiple it traded on in 2006, Apple's market cap would be $1 Trillion.

Why Apple might just be the first $1 trillion company http://blogs.reuters.com/columns/2011/08/09/why-apple-might-...