Let us do a thinking exercise: suppose after earnings today, Apple goes down to -$100. Or P/E equals to around -2. Yes, P/E doesn't go to negative. Also let's say if it go to negative is because the earning is negative. But let's say you play along.
So the cap size becomes something like -$90 billion. You realize you lose quite a bit of money. But let's say you don't look at your asset for the moment. Just look at the numbers from earnings. Would you conclude that Apple is sinking? Would you decide to sell all your Apple stocks? Apple is doomed? "Apple's empire is falling apart?"
More importantly, if you own the stock, someone needs to offer you $100 per share. Would you accept that deal? Or would you say "Apple is doomed, it falls for 120%, it *only* has $130 billion cash, it *only* makes ~$50 per share. So I am not going to accept the ownership of this forsaken company!"
I am sorry bears, if I were you, I would run to get more Apple stocks.
Now translate all these to real-life. Of course, Apple didn't drop to -$100, it drops for 10% AH. Effectively, it means P/E = 10. Forward P/E =~ 8.
So...... it is cheaper than McDonald (17.6), Coca Cola and oh.... P/E of S&P (17).
Once I think in this way, the current pessimism of Apple is uncalled for. Not to say it is paying dividend.
The truth is if you invest a company for long term, you don't really care too much for its short-term variations. Unless you can derive something bad is happening in the company. But I fail to see one, are there any shenanigans from managements? Do they fail to have a valid business models? Do they fail to make money? Are they overpriced? Those are factors which matter to me when I do long term investment.
Some ask how "long term" is long term? If you ask me, let's say 500 years.
Disclosure: I am long AAPL.