On September 21, 2012, the price for a single share of Apple Corporation stock hit an all time high of $705.07. While no one could know with any certainty at the time, between September 21, 2012 and today, January 16, 2013, the price per share would drop approximately $200 per share. Given the fact that Apple is the biggest publicly traded company in the world based on “market capitalization,” a term for the number of outstanding shares multiplied by the price per share, its stock price has been heavily covered by the news media. There are examples of state owned companies that are bigger. Saudi Arabia’s state oil company is significantly larger, for example. But the magnitude of the Apple, combined with the volatility of its stock price, has interested me enough to attempt to understand it, along with some concepts about stock market as a whole. The price of a share of a publicly traded company is determined just like any other product or service in a market place. If the demand for shares of a company is greater than the supply of shares for sale, the price goes up. If the supply exceeds demand, the price goes down. One of the reasons that the price of individual stocks, also commonly referred to as “equities”, can be so difficult to predict is that a stock’s price is determined by human behavior, which is often unpredictable and irrational. I think the $200 drop in the price per share of Apple illustrates this concept. In terms of the company’s market capitalization, Apple has dropped somewhere in the neighborhood of $160 billion in a matter of months. To put that number in perspective, the entire market capitalization of The Walt Disney Company, a truly huge company, is $91 billion. So, from September to January, Apple has lost the equivalent of more than one and a half Disneysin value as far as the stock market deems the two companies to be worth.