AAPL is selling for 10X trailing twelve months earnings. Facebook is selling for 71X TTM earnings. While Apple’s iPhones sales may start declining at this point, you can’t get more pessimistic than that. Perhaps that’s why Warren Buffett has bought into it.
Remember, hedge funds have a metric that they have to beat every year: the S&P 500. You don’t. You have the luxury of finding these stocks that are out of favor and buying them for the long haul.
Personally, I find both Facebook’s and Apple’s futures too difficult to predict. Apple does pay you 2.39% (at today’s price) to wait and see.
For the hedge-fund set, Apple Inc.’s stock went from gadget-making beauty queen to pariah in the first quarter.