Opinion: Lucky Newton saw a different Apple

Apple Inc now commands a value higher than Italy’s GDP of $2 trillion, two years after hitting the $1 trillion mark in 2018. Microsoft, Amazon and Alphabet, which owns Google, are also reaching for this ethereal height, even as the first company to climb Mount $2 trillion, Saudi Aramco, straggles, weighed down by falling demand for oil. Of course, Apple is a remarkable company, but its current valuation is a product of economic crisis, investor panic and lack of options.

Even since the Global Financial Crisis of 2007-08 induced central bankers of the major economies to adopt a policy of creating lots and lots of fresh money, in a policy dubbed quantitative easing, the world has been awash in liquidity. Instead of raising the prices of goods and services, this liquidity has inflated asset prices, pushing price-earning ratios sky-high and bond yields close to zero.