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J.C. Penney Crashed, Best Buy Is Next

NEW YORK ( TheStreet) -- Kindly refer to the following three J.C. Penney (JCP - Get Report) articles for proper context:

Aug. 13, 2012's 2012's Most Delusional CEO: Sell His Stock Now, Nov. 12, 2012's Stop the Bleeding At JCP: Fire Ron Johnson and from this year, Aug. 13's Bill Ackman: The Great Scapegoat At JCP.

I point you to these articles, no doubt, to seek congratulatory fist pumps and chest bumps. But it's about more than that. It's about the way we ought to evaluate companies as thinking humans and consider stocks as investors.

Like everybody else, Ron Johnson had me fooled. As it turns out, Steve Jobs was one of the few who called it. Jobs thought Johnson was crazy for leaving Apple (AAPL - Get Report).

As soon as I discovered the real Ron Johnson -- shortly after he gave one of the most egomaniacal and delusional CEO speeches ever at an early 2012 JCP investors conference -- I made my one and only turn, shifting to predictions of the company's doom.

Almost out of the gate, Johnson made it clear that he succeeded at Apple because he rode shotgun to Steve Jobs, paid attention in MBA school and could efficiently implement orders. Just like the best drive-through attendants at the highest-grossing fast food establishments.

From that point forward, even after Johnson got canned and Bill Ackman added to JCP's circus atmosphere, nothing changed at the company. At least nothing to justify the blame laid on Ackman or the calls from many analysts and onlookers to purchase JCP stock.

If you bought JCP last summer as it recovered into the $20s or on one of 2013's dead cat bounces, more power to you. You made a trade. You timed it well. You got lucky. But try not to confuse any part of that process with investing or understanding what's happening at a company, let alone in a space.

Take this behavior up as a strategy and you'll lose more often than you'll win. Because "victories" like the one you might have experienced in JCP and the one you might be experiencing in Best Buy (BBY - Get Report) provide false confidence. This bravado gives you the faux green light to put your money into companies that have nothing going for them but misguided and misleading sentiment.

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