Financial Markets' Waning Confidence in Apple

Moneybox
A blog about business and economics.
Aug. 31 2013 6:03 AM

Financial Markets' Waning Confidence in Apple

Screen-Shot-2013-08-30-at-8-30-6.36.23-PM

Neat chart from Horace Dediu. You can think of the price-earnings ratio as a measure of financial market optimism about the future. By the autumn of 2009, the S&P 500 had settled into a low-PE ratio, high-pessimism point from which it's been slowly recovering.

Apple, meanwhile, spent that time as a company that not only had high profits but about which there was a lot of optimism about earnings growth. More recently, though, the market's view is that Apple will grow slower than the average company over the relevant time-frame.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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