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TheStreet Open House

The Bust of 2000: Did Amazon Bears Learn Anything?

Stocks in this article: AMZNAAPLFBEXTR

NEW YORK ( TheStreet) -- While I don't expect investors to turn their backs on basics like dividend reinvestment and balance sheets, it makes sense to update your worldview from time to time.

On Monday, I argued that Amazon.com (AMZN) will hit $1,000 per share before Apple (AAPL).

Of course, many AAPL bulls responded with the standard defensiveness. That's expected; therefore, it doesn't bother me.

I'm still taken aback, however, by the responses from those who take exception, not with long-term AAPL bearishness, but any hint whatsoever of AMZN bullishness.

Here's a sampling from Twitter:

@LeoKaplin - $AMZN @jimcramer @RoccoPendola how can you justify PE > 315 for any company.. Unless they found cure for cancer
@wendland99 - @jimcramer @RoccoPendola this is assuming they make some profit, last quarter was 1% profits, what gives?

AMZN's P/E ratio is 315. AAPL's is just 16. Ford's (F) is freaking 2. That's tough to reconcile. I completely understand.

It's almost as challenging to wrap your head around those P/Es as it is the marriage between Ric Ocasek of The Cars and the breathtaking Paulina Porizkova. And they've been together for more than 20 years.

Save the tired, "Did you learn anything in 2000?" line. Because, yes, I learned a lot.

I worked in San Francisco during the dot-com bust. I spent my days on the phone with instant IPO millionaires, VPs at companies like Extreme Networks (EXTR) and Foundry Networks.

The experience taught me something that would have come in handy for folks holding the bag on Facebook (FB) from $40: Don't participate early on in an IPO.

It also taught me about vision and competitive position. Extreme and Foundry sold widgets. Tangible products, yes, but did they really have a future in a world containing companies like Cisco Systems (CSCO)? Of course not.

Unless you got lucky on the IPO or had good timing ahead of a buyout, you licked wounds.

If, however, you had vision back in 2000 (I did not), you're counting profits with AMZN. This AMZN-EXTR comparison chart tells the story.

AMZN Chart AMZN data by YCharts

AMZN suffered when all hell broke loose in 2000. But, in hindsight, it's evident that it was a different type of suffering.

Even back then, Amazon had a strong and sustainable -- we can now call it "unwavering" -- business model. Companies like Foundry and Extreme were founded to get bought out.

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