Very few people actually short AMZN. You see, Amazon bearishness is all talk and zero action.
It's understandable that only about 2.5% of the stock's float is short. Not enough "idiots" (in the John Locke sense of the word) exist among us. Unless you're an incredibly nimble day trader, would you want to get stuck in front of that freight train?Cue the standard line from peanut gallery: Yeah, but, it's still absurd that AMZN trades at such a huge multiple. It does. Incredibly absurd multiple, man. I feel you. Trailing 12-month price-to-earnings ratio, as I write, is 3,166.07. Even gives me a pause. We're simply not used to seeing such astronomical numbers in that column. Even the forward P/E is lofty: around 151. This makes folks uncomfortable. They pause. Then they freak out. But, again, they don't dare stay short AMZN overnight, if they get short at all. Instead of looking at the reality of the situation, they look for answers they are comfortable with, answers that make themselves feel good. Like big bearish men. (That's a loaded one!) The market's irrational. Everybody who likes Amazon -- company and stock -- they're all crazy. All of them. I am right and everybody else is wrong! AMZN bears -- so misunderstood. Living in a world where there's simply something off kilter. Logic never prevails. Margins squeeze, AMZN moves up. The company reports a loss, AMZN hits new highs. The answer is right in front of you. In fact, Cramer supplied it Monday right here on TheStreet in Amazon's Jeff Bezos is the Sam Walton of Our Time. Look at that smile on Cramer's face. Ear-to-ear baby! (C'mon, name the movie!). Watch the video in that link. Jim makes sense. I dare to differ with Cramer when he says AMZN is the only stock he assesses without looking at the P/E. I dig that statement, however, other stocks exist. With a long-term time frame and a good handle on the long-term narrative, I don't care much about, say, LinkedIn's (LNKD) TTM P/E ratio of 718. But that's another story for another article. Vis-a-vis AMZN, many investors, particularly the too-scared-to-short-the-stock bears, read the P/E all wrong.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV