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

Why Amazon Crushes Apple as an Investment

**Telling Apple (AAPL - Get Report) and (AMZN - Get Report) charts on Page Three.

NEW YORK (TheStreet) -- The hysteria over Twitter (TWTR - Get Report) euphoria underscores the mindlessness of the media as well as the pointlessness of Wall Street "analysis" and their garbage-in, garbage-out quantitative models.

Over the last week we have seen the financial media drone on about TWTR's run and its subsequent valuation. Everybody's looking for answers, but only to the extent scribes, pundits and talking heads can keep pumping the inane Why did Twitter take off question, making it appear even more mysterious and confusing by the second.

Because mystery and confusion equals, at least as the fading theory goes, page views and ratings.

Must Read: [video] Quick Take: Stocks to Pull Back in Early 2014, Then Gain for the Year

Part of the problem is that so many folks who pay attention to the stock market can't let go of traditional notions of valuation. As humans, we tend to hang on to what we know. We like the comfort of the status quo, what we learned in school, whatever.

It's easier to spew "AMZN is overvalued," rather than try to wrap your head around why that tag no longer matters or even applies.

It's even easier to look at stocks that have a high price per share (but not necessarily a high price), such Google (GOOG - Get Report), and call them "expensive" or argue they can't possibly go higher.

Other than me!, there's only one guy I have seen lay it out in some of flavor of how it is. TheStreet's Jim Cramer said it best in a Real Money article I have bookmarked, The Case for Amazon:

Welcome to the world of bull-market discipline -- the discipline to buy stocks that aren't cheap but are right. It's the rigor to recognize what the market wants, and not what you want. It's the dichotomy that says you would rather have your portfolio be hated by the intelligentsia and make money than be bound by concerns that simply aren't working right now.

That's one way of saying throw the rule book -- and what comforts you -- out the window.

I'll take it a step further.

This is the type of correspondence I receive everyday, almost all day via the myriad forms of communication our society employs.

From the comments section of last week's article where I called Google a $2,000 stock in 2014:

As usual. you throw a vague number up into the air, without even remotely saying what metrics you might have ued (sic) to get there! Isn't it all emotional then?

I guess this guy wanted something that reads more like this:

Our $35 PT is based on our DCF model through 2020, which assumes a 12% cost of capital, 4% terminal growth rate and a 13.0x terminal EBITDA multiple. Key Drivers of our DCF projection include 2012-2020 CAGRs of 37% and 114% for Revenue and EBITDA. Our PT is also equates to ~7x FY2015E revenue of $958M.

1 of 3

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 $93.74 0.00%
AMZN $659.59 0.00%
GOOG $693.01 0.00%
TWTR $14.62 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs