I am happy about continuing skepticism about Apple being expansive, but value investing is not just forward P/E.

Well, the assets of the firm matter, too. A company with $1 per year in earnings but also owning a tonne of gold is worth more than the same firm without the tonne of gold.

But other than that, I disagree emphatically. ONLY the future earnings matter, provided you mean ALL of the future earnings, not just next year's. I personally don't estimate earning power past the one decade mark, purely because it's so hard, not because it doesn't matter. The future E numbers are of course unknowable, but they will determine precisely the ultimate forward returns. A good story won't buy you food.

Always remember that the value of any purely financial instrument is the present value of the future distributions it's capable of supporting...nothing more, period. It makes plenty of sense to pay high prices for growth, but not if that growth does not ultimately lead to future earnings.

Mostly that pile of possible future coupons comes from the stream of future earnings, though it also includes some relatively minor and easily forgotten things like the firm's own ability to buy and sell things profitably which creates earnings and more assets; some positive or negative constant for debt and assets when the firm is wound up; the potential benefit from defaulting on some debts; positive or negative taxation quirks; and the bonus or premium that might happen as the last coupon if the firm is bought out at a premium or discount to its true value. But mainly it's just the pile of all future earnings for most firms.

Jim