By all normal parameters, Apple’s share price is low. As I explained in my post on Tuesday, if Apple were to be valued on the same basis as Amazon, one Apple share would cost over $3,500, some seven times the current level. I also made the point that I am no Horace Dediu, and that’s a fact. But Horace himself has posted another insight into Apple’s pricing paradox which sets out to explain why future value is not recognised:
A disruptive company is inherently unpredictable. Success and growth are unrewarded because there is no understanding of the underlying causes of these phenomena and therefore there is no expectation of repetition. In other words, a five year dead-straight line of logarithmic growth is not a sign of anything resembling reliability if the underlying causes are not understood. Today Apple is still a mystery wrapped in an enigma and without a causal understanding of its success its pricing will remain paradoxical.