Subject: Re: OT: big companies
As far as market cap change Jim your incessant Apple over valuation posts over the years stand as the worst analysis I have encountered. Just plain facts. We all make mistakes, some obviously large ones.

I think it's fair to say you're not reading very carefully what I've written about Apple : )

I am not bearish on Apple, and, as far as I can remember, never have been. Never.
I have sometimes expressed the opinion that I was steering clear because I wasn't too sure what the product mix would be in a decade,
and at other times (including now) I wasn't confident enough in the rich market price to count the entirety of that price as part of the conservative value of a share of Berkshire.
I am willing to allow that Apple might well be worth its current price, but I am merely unwilling to *assume* that this is true.
On the other hand, I've also been quite bullish when it was plainly cheap. It was trading at 12 times (smooth) earnings less than five years ago, and under 10 a couple of years before that.

My main heresy is that I just don't think that the value has risen any faster than the (smoothed) earnings trajectory. Gasp!
When the stock price is exuberant in the recent past, that stance sounds bearish, hence your comment.
When the stock price is in the dumps, my approach probably sounds exuberant.

For example, (smooth) earnings per share are around four times what they were nine years ago in 2014. Yet the share price is up by a factor of eight since then.
As a basic starting point, it seems reasonable to start with the notion that a share of Apple is worth around four times as much as it was then, not eight times as much.
Call me crazy.

When valuing Berkshire's stake in Apple, I simply don't care much about what the market price is. I treat is as I would any other business unit.
Estimate the current cyclically adjusted earning power, and apply a not-too-crazy multiple appropriate to the reliability and growth rate of the earnings trajectory.

Since the current market multiple for Apple is quite high, this might sound like a bearish comment to those not paying close attention.
I don't see it that way, as I'm not predicting that the stock price is going to fall.

I guess the strongest statement is that I wouldn't count on a particularly good return from Apple stock in the next few years. That outcome would require some unreliably bullish assumptions I'm not comfortable with.
About either implausibly high earnings growth rates, or far-future market multiples higher than one should be willing to count on.

Jim