Now, let it be known, I don't treat valuation metrics like old school market guys. In fact, I no longer think valuation when I see a P/E. I think confidence. How much confidence do investors have in the company's ability to maintain its present and anticipated pace of growth for the foreseeable future? From there, I assess the company's strategic-competitive position to see if I can have the same level of confidence.
Throughout 2011, I was never able to get with
(NFLX - Get Report)
"confidence" multiple. Wall Street was overconfident there. It did not price the stock appropriately vis-a-vis Netflix's business model and shaky future.
The same thing is about to happen again
By contrast, I'm good with
) "confidence" multiple right now. But, as OK as I am with Wall Street's trust in Bezos, I sure as heck don't believe we should be 275 times more confident in Amazon's long term than we are in Apple's simply because Tim Cook, not Steve Jobs, toils as CEO. That's nuts.
And that's why the portrayal "Investors Struggle to Get Handle on Apple" is absolutely absurd. If you can't get a handle on Apple, you haven't been paying attention.
--Written by Rocco Pendola in Santa Monica, Calif.