NEW YORK (TheStreet) -- As my recent work makes clear, I'm an unabashed Apple (AAPL - Get Report) fan. By and large, I think there's nothing but good in Apple's future under Tim Cook. However, I'm also a realist. I do my best to be as objective as my biases and filters will allow, which leads to the seemingly absurd statement that Amazon.com (AMZN - Get Report) is, by a slight margin, a better investment than Apple.
Absurd, yes, on the surface, but not upon further inspection. So please hear me out ...
In his article, Dana cited an article I wrote in April after AMZN plummeted on earnings concerns. I could take the easy route and republish Making Sense of the Crash in Amazon Stock because everything I said in that piece holds true three months later.
As the record continues to show, immediate reaction to Amazon earnings is nothing short of hysterical. Consider part of Blankenhorn's case:
When Rocco wrote that story (in April), by the way, (AMZN) stock was trading at $296. After its latest "crash" it was at $317. That's down from $358 at Thursday's close, so traders who picked up shares last time they were rocked and sold right before earnings are sitting pretty right now.
Agreed. But, after we note, for the record, that AMZN closed Monday's session at $320.41, let's set the stock price aside. We tend to focus too much on day-to-day, week-to-week and even quarter-to-quarter movement.
It has become passe having the same debate every time Amazon does this. First, I want to reiterate something I said in April because I think it's important, not only with respect to AMZN itself and AMZN being a (slightly) better investment than AAPL but investing in general:
If you're long AMZN, let's hope you didn't do it simply to ride the momentum. If you did, sorry, but you sort of deserve any pain you're feeling right now. Momentum investing is not a long-term strategy. It should not comprise any segment of your portfolio other than that percentage you set aside for speculative bets. The size of that speculative allocation depends on the way you stomach risk and your overall financial condition.
The right way to be long AMZN is to have understood the story before the intense momentum kicked in. To have decided that it's the long-term, leave-it-to-your-grandkids stock of our generation. But to do that you had to a.) do your homework months and years ago and, subsequently, b.) buy into what Amazon CEO Jeff Bezos has been selling since the late 1990s! ...
If you don't understand this line of thinking, shut up. Quietly short AMZN stock. If you time it right, you might make money. But don't confuse what you're doing with standing up for the purity of investing. Because if you hate Amazon the company and/or AMZN the stock, you don't understand investing. You're playing the momentum game, which makes you part of the problem.
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