Amazon bearishness is all talk and zero action. It's understandable that only about 2.5% of the stock's float is short. Not enough "idiots" (in the John Locke sense of the word) exist among us. Unless you're an incredibly nimble day trader, would you want to get stuck in front of that freight train? Cue the standard line from peanut gallery: Yeah, but, it's still absurd that AMZN trades at such a huge multiple. It does. Incredibly absurd multiple, man. I feel you. Trailing 12-month price-to-earnings ratio, as I write, is 3,166.07. Even gives me a pause. We're simply not used to seeing such astronomical numbers in that column. Even the forward P/E is lofty: around 151. This makes folks uncomfortable. They pause. Then they freak out. But, again, they don't dare stay short AMZN overnight, if they get short at all. Instead of looking at the reality of the situation, they look for answers they are comfortable with, answers that make themselves feel good. Like big bearish men. (That's a loaded one!) The market's irrational. Everybody who likes Amazon -- company and stock -- they're all crazy. All of them. I am right and everybody else is wrong! AMZN bears -- so misunderstood. Living in a world where there's simply something off kilter. Logic never prevails. Margins squeeze, AMZN moves up. The company reports a loss, AMZN hits new highs. The answer is right in front of you. In fact, Cramer supplied it Monday right here on TheStreet in Amazon's Jeff Bezos is the Sam Walton of Our Time. Look at that smile on Cramer's face. Ear-to-ear baby! (C'mon, name the movie!). Watch the video in that link. Jim makes sense. I dare to differ with Cramer when he says AMZN is the only stock he assesses without looking at the P/E. I dig that statement, however, other stocks exist. With a long-term time frame and a good handle on the long-term narrative, I don't care much about, say, LinkedIn's ( LNKD) TTM P/E ratio of 718. But that's another story for another article. Vis-a-vis AMZN, many investors, particularly the too-scared-to-short-the-stock bears, read the P/E all wrong.
In these modern times -- where we get our news, opinions and entertainment over the Internet and we no longer measure stocks using fractions -- the P/E is less a measure of valuation, more a gauge of investor confidence in things like management, the business model and the pace of and reasons for reinvestment of capital. Sure, you'll get things like P/E contraction. Day and swing traders will have their chance to short AMZN -- like all stocks -- and make money. But, from a long-term perspective, none of this matters. Listen to Jeff Bezos when he tells you margins don't matter to investors, free cash flow does. He's not pulling this stuff out of his ear. People with substantial money in AMZN likely have his ear. Listen to Bezos when he tells you -- over the course of 13 to 14 years(!) -- that he does not manage the stock price. Instead, he focuses solely on visualizing his company's long-term opportunity and investing accordingly. That's what Amazon has always done, is doing now and will continue to do. That uncomfortable P/E actually should make you quite comfortable, assuming you're a long-term investor not sensitive to noisy day-to-day or even month-to-month, quarter-to-quarter price shocks. That old-school valuation metric tells you that the big money believes this thing is poised to make good on its investment in its future. Whereas Netflix ( NFLX) to $300 in 2011 was a case of misguided Wall Street analysts propping up a house of cards, AMZN of 2012-13 absolutely is a story Wall Street got right. They're not about to be wrong anytime soon. Amazon is fixing to dominate the world. Hard to imagine considering the level they're at now and the feeble competition. Retailers who chase the very model that crushed them by reacting with rank-and-file answers such as price matching and free popcorn. So if you're part of this vocal minority of AMZN haters, stop it. This is not only a great company, it's a great stock led by an superb management team. Hating AMZN is as difficult for those of sound mind to comprehend as trashing Apple ( AAPL). Follow @rocco_thestreet --Written by Rocco Pendola in Santa Monica, Calif.