It’s been a week since David Einhorn told investors in his Greenlight Capital hedge fund that he was betting against a list of “cool kid” stocks whose value could fall as much as 90% “if and when the market reapplies traditional valuations.”
A reapplication of traditional valuations — starting with, say, price-to-earnings ratios — is something Apple investors have waited a long time to see. In last week’s bloodletting, big money flowed out of some high-flying tech stocks and into Apple.
But based on the 12-month trailing P/Es listed below, the market still has a ways to go:
• Apple (AAPL): 14.24
• Facebook (FB): 72.63
• Amazon (AMZN): 462.68
• Twitter (TWTR): N/A