This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

AAPL, AMZN, NFLX: Does Common Sense Ever Prevail on the Stock Market?

NEW YORK ( TheStreet) -- I'm still angry over the media and analyst hysteria that fuels Apple's (AAPL - Get Report) volatility. And it's still happening!

While the stock market has always been the ideal case study for behavioral psychologists, emotion drives it harder now more than ever. For better or worse, you have to know how to play both sides of the coin.

Consider Netflix (NFLX - Get Report). I proudly -- and accurately -- ride both sides of the fence on this one.

Harken back to December 19, 2012: Netflix to $100, But Should You Buy the Stock?. Read that article and the links peppered throughout. I explain my cautiously bull case for NFLX. Much better company today than it was in 2011.

The big difference: Netflix now uses a less Wild West, sharper-focused content acquisition strategy than it used to.

Netflix serves several niches well. At the top of the list: television programs for kids. As such, it let Starz go; it, presumably, isn't losing sleep over HBO and Universal Pictures' decade-long deal; and it landed exclusive, first-run Disney (DIS) content starting in 2016.

Makes perfect sense for NFLX to pop because that's the bull story -- or at least it ought to be -- and it's perfectly logical.

So trade it, don't own it.

Because, as I wrote this morning:

Sanity, logical thought, rationality -- for once, it made more than a cameo appearance on the stock market. It prevailed.

Don't look now, but the old guard media names -- DIS, News Corp (NWSA) and Time Warner (TWX) -- easily outperformed NFLX over the last year. They're the types of names you own with confidence for the long term.

Similar situation with Pandora (P - Get Report): Trade it, only kind of, sort of own it.

Sometimes sanity does prevail.

In a perfect world, old-guard media stocks outperform NFLX because they operate from superior positions of strength. Ultimately, Pandora wins out because those of us who follow the company closely and interface with its executives know it's for real. At day's end, AAPL achieves lofty price targets because that company only loses if it beats itself.

We get glimpses of sanity on Wall Street all of the time, even from its crew of hack analysts.

As TheStreet's Antoine Gara explains with precision, Morgan Stanley upgraded Amazon.com (AMZN - Get Report) this morning.

Now, Morgan (enter cheesy financial media cliche here) pounds the table for AMZN on the basis of sustainable international growth. That's icing on the cake man. I love the thesis, but the Amazon story still happens at home. On Christmas Day, the company had more traffic -- almost four times as much traffic -- than Walmart's (WMT) Web site.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $124.24 0.70%
AMZN $367.35 -0.97%
NFLX $418.26 -0.83%
P $15.82 -0.19%
FB $83.01 0.11%

Markets

DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs