This Day On The Street
Continue to site
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

The Higher Flies, the More Free Beer Flows

Trends and other statistical findings are fantastic. Until you find one of the many situations where they don't apply.

When you're dealing with a relatively small present-day sample -- the dozen or three dozen stocks or so we like to use as comparison cases -- you have to go on a case-by-case basis. Your ability to make a more qualitative analysis -- one that works in some quantitative data -- ultimately dictates your ability to determine which stocks will continue to fly high and which ones will ultimately fall.

Dig into the business, not a broad application of history.

If Amazon, as Heller indicates, is accomplishing things no other company has accomplished before and there's no end in sight, why shouldn't it have what we tend to call, when we're thinking old-school, a sky-high valuation. If you can find true holes in the business -- something beyond the standard it's just overvalued and that must correct argument -- you might have something. That's the approach I take when I'm bullish NFLX the stock, but bearish Netflix the company.

Must Read: Jim Cramer's Top Stock Picks: COST MDR XOOM WU BGG ULTA FIVE

Ultimately, we're short-changing the metric of investor confidence when we have these discussions.

Jeff Bezos is alive. Steve Jobs is dead. Simple as that.

AAPL doesn't become a $700 stock again until Tim Cook wins over the confidence of the stock market. He likely will not do this, in any wholly meaningful fashion, until he kills, creates or reinvents a new category.

AMZN doesn't crash, barring some unforeseen hitch with the business, until Jeff Bezos dies, gets sick or finds a reason to step down from an unfinished job. Knock on wood on last sentence.

That's the reality.

I have yet to see a truly well-thought out bear case on AMZN. They all toss out the same quantitative pitch followed by age-old valuations tend to work themselves out line. Try using that one next time you're in a bar.

All I know is that, as AMZN continues to rise -- and you know it's headed to $400 -- the beer will flow. TheStreet's tech editor Chris Ciaccia and TheStreet contributor Robert Weinstein already owe me cold beer at a reasonable price. I'd be more than happy to add Jonathan Heller to the list.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist for TheStreet. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.
2 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
Only $9.95
14-Days Free
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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.24 -0.41%
AMZN $659.09 -1.76%
FB $117.81 -0.21%
GOOG $701.43 0.82%
TSLA $211.53 -4.96%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs