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The Higher Amazon.com Flies, the More Free Beer Flows

NEW YORK (TheStreet) -- Stop me if you have seen or heard this before ...

In my view, this is a case of "like the company, don't like the stock." Despite all of Amazon's innovation and all of the market share it has taken from the brick and mortar stores, its valuations are out of whack.
Insert old-school, textbook quantitative support for why "its valuations are out of whack" HERE.
I continue to utilize Amazon as a consumer, and I remain impressed by what the company has been able to accomplish in terms of innovation. But I will not go near the stock. There is too big a disconnect between the price and the valuation. The current price reflects extremely high expectations, and history has shown us how those situations typically end.

That's not from your grandfather, ink-stained fingerprint and all (because he was using his index digit to search for a stock ticker in the morning paper), that's TheStreet contributor Jonathan Heller. He joins a long line of luminaries to regurgitate the most tired and misguided bear case on Wall Street.

Yes. That's harsh. But it's half in good fun. And Jonathan knows that. I told him I was going to "rip him." And he knows I tend to love his work. But here's where Heller and the remaining AMZN bears go wrong.

They cite history as if it's guaranteed to repeat. That's a dangerous proposition. More dangerous than ignoring history because you fear you'll be doomed to repeat it. Plus Amazon is not typical. Heller said it himself in the closing paragraph of his article.

Must Read: Create a Process for Profitability

Does history provide a written assurance that all quantitatively overvalued stocks will play out narratives that won't end well? Or do outliers exist? Don't we live in a different world and play in a different stock market than we did in 1980, 1999-2000, 2008 and even 2010? We're not talking destiny here; we're talking the inconsistent and seemingly irrational workings of the real world.

For goodness sake, Netflix (NFLX) is overvalued. So are Pandora (P) and Tesla Motors (TSLA)Apple (AAPL - Get Report) is undervalued. This is all true if, and only if, we use old and outdated methods of assigning valuation.

I'm not relying on the false notion that a rational market will render justice, making AAPL the high-PE stock it should be, if we're to justify AMZN, NFLX, TSLA and P's valuations.

Of course, you could take another view of the situation: AAPL is actually sanely valued. You can't use an overvalued and irrational market or set of stocks to determine what AAPL's value should be.

I disagree with that as well.

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