There's a big discrepancy between Apple's earnings and its stock price, and it became even more glaring on Tuesday, when the company reported results for its latest quarter. The well-managed launch of the iPhone 4S and the ever growing popularity of Apple products around the world conspired to send earnings and sales zooming past analyst estimates.

Apple's sales were $46.3 billion in the quarter that ended Dec. 31, up 73 percent from a year ago. That's more than twice the revenue of its old nemesis, Microsoft Corp.

Net income grew 118 percent to $13.06 billion. That's more than Google Inc.'s revenue for the quarter.

Investors cheered -- sort of. Apple's stock rose 6 percent Wednesday, hitting a new all-time high of $454.45.

And analysts believe the stock should be trading higher, based on the earnings expected this year. Before the earnings report, 45 Wall Street analysts who follow the company believed, on average, that Apple should be worth about $556 per share. After the report, the analysts rushed to raise their estimates, some as high as $650.

"This isn't supposed to be happening to a company of this size," said David Rolfe, chief investment officer at Wedgewood Partners Inc., manages a $150 million fund where Apple is the largest component. "In our collective investment experience, none of us have ever seen this before."

There are two main reasons for the missing hundred-dollar bills in Apple's stock price.

One is Apple's policy of hoarding the cash it makes, like a dragon resting on a pile of gold. It doesn't pay dividends or buy back stock like many companies do. The policy is all the more striking when you consider...