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Valuation (current price: $119)

This is not to say that Apple (NASDAQ:AAPL) won’t continue to grow. But does that mean that this will translate into an increasing stock price?

When you’re looking to buy a stock, the most important factor is of course the price! One would buy a green apple from your local supermarket for $200 each just because everyone else is, right?

One has to consider a whole slew of factors before making a stock purchase. For the beginning investor, some basic things to look for are:

• Book Value
• Earnings / Share (EPS)
• Price / Earnings (P/E)
• Beta

With a book value of $20 / share and a beta of over 2.5, AAPL is simply too risky of a stock to purchase. Its price is really inflated because investors are betting that AAPL will continue to grow and people will continue to buy their stock.

And they probably will continue to grow, and people will probably continue to buy their stock.

But one shouldn’t be making your investment decisions based on how the market is going to react. One should be investing based on how a company is going to perform, and how badly the market has priced the stock of this particular company.

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