How can you reconcile trailing 12-month P/E ratios of 14, 173 and 72 for AAPL, AMZN and FB, respectively? Or forward P/Es of 211 and 16 for P and ZNGA? You cannot. They're all over the board.
Pull up almost any statistical gauge of valuation and you come to the same conclusion: This makes absolutely no sense. That's what tends to happen when something becomes irrelevant.
You see the same thing taking place within a growing number of academic disciplines -- the move from quantitative to qualitative research. Or, at the very least, the use of qualitative data to better color quantitative results. This method also works in reverse.
Investors need to do the work to understand the stories that color a space or a particular company's narrative. That's where you find some consistency. And that's where the bull case exists; not in an MBA's tabulations. Numbers can complement the story, but they do not write it. People do.
As powerful as the stock market is, it cannot cause wild, day-to-day gyrations in a solid company's business model or how customers use a product or service like it can with its valuation. Facebook might lose $5 billion in market cap in a week, but don't expect Mark Zuckerberg to pull a Reed Hastings and change direction on an almost as frequent basis.
Visionaries like Jobs, Bezos, Zuckerberg, Pincus and Westergren not only stand several steps ahead of most others, they prepare their companies well to hit each signpost along the way. I've got my money on the final three as they continue to position their companies to take the lead as the mobile arena frantically emerges and our social, on-demand and personalized world continues to develop.
Two, three, five, 10 years from now, I do not want to lament having missed out on the companies that ended up being the next Apple, Google, or Amazon.