Apple Competes With Its Unwritten Future

NEW YORK ( TheStreet) -- Joe Strummer of The Clash got it right: "The Future is Unwritten" baby. That's especially relevant vis-a-vis Apple ( AAPL). (The greatest "London Calling" cover ever comes at the end of this article!).

My latest ( AMZN) article - Amazon's P/E of 3,000: The Ultimate Buy Signal -- generated considerable reaction.

TheStreet and Real Money Pro contributor Robert Weinstein called me nuts for owning the opinion. In his article, he addressed "investors" as he discussed Amazon like the day trader he is.

And Weinstein is a damn good day trader. Here's a guy who spends most days in a pair of cheese curd-stained shorts beating the other guy (often some Wall Street hack in a suit and tie) on trades that open and close over the course of seconds, minutes, sometimes hours and occasionally days. He's one of the few I would follow into trades blindly. He's that good.

That said, he doesn't understand Amazon. He reads the 3,000 P/E like the typical, misguided Amazon bear. Weinstein can make money on Amazon and most other stocks every single day. Long. Short. Both. Doesn't matter. Most of us are not quite that nimble. Consequently, you invest in companies you perceive as strong and sustainable for a period that extends beyond the foreseeable future.

Pull up an Amazon chart. With few exceptions, if you held Amazon for more than a minute (figure of speech there), you made money. As of Friday's close, the stock is up 17,763% over its lifetime. It's up 236%, 44%, 50%, 23%, 11%, 7%, 4%, 1% and 1%, respectively, over 5-year, 2-year, 1-year, 6-month, 3-month, 1-month, year-to-date, 5-day and 1-day periods.

All of this, yet we're expected to believe that just because Apple trades at 12 times earnings, Amazon must -- out of nowhere, after more than a decade of dominance -- crash and burn. That's nuts. If only these wishful intuitive correlations held in the real world.

In Apple Loses If It Beats Itself, I riff on a lack of meaningful competition. Apple competes with itself.

On my most recent CNBC appearance with the great Carl Quintanilla, I introduce the concept of 'the two Apples.' We're not comparing apples to oranges, we're comparing Apple to Apple.

There's the Apple inside the next 6 to 12 months that can do almost anything it wants and win big. The foreseeable future Apple.

Apple can slum it, selling its products through the dying and inferior Best Buy ( BBY). It can produce a cheaper iPhone and take control of global smartphone marketshare. No question.

Despite the fast-grab, short-term easy payoff, these moves would ultimately lead to Tim Cook's departure. But he's not that stupid. As Apple's SVP of Worldwide Marketing Phil Schiller noted the other day, a cheaper iPhone is not the future of Apple products. We'll see how Apple handles its reseller relationships.

Then, there's the Apple beyond the next year. The 12- to 18- to 24-months down the road Apple. The decisions the company makes today set it up for that period. A period where we still might not have suitable answers, but we'll get more clarity on the question of whether Apple can not only innovate, but remain a socially-dominant, enterprise-prominent premium brand without Steve Jobs.

I'm convinced that, all noise aside, this uncertainty -- this unwritten future -- keeps Apple undervalued and holds the stock back. While nothing's certain, there's a lot less uncertainty in Amazon's future.

Over there, you still have the mastermind, the architect, the disruptor in charge. As far as we know, Jeff Bezos is healthy with no plans to retire anytime soon. There's so much unfinished business. This consistency breeds investor confidence, which provides for the seemingly "nuts" 3,000 P/E ratio.

It's that simple. Not complicated in the slightest. I'm not sure why otherwise intelligent folk such as Weinstein must make it so. Despite what the SEC requires mutual fund companies to tell you, sometimes past performance IS indicative of future results.

These valuation metrics gauge the perceived likelihood a company will maximize long-term potential. Sure, it's a bit Vegas-like, but -- bullish, bearish or otherwise on either name -- you have to admit it's not nuts to put more faith in Amazon than Apple at this point in time.

And now, because we could all use a little of Springsteen, here's some Springsteen!

--Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.