If you're paying attention to Amazon's results, I know what you're thinking -- 18 cents is still a victory because the mean estimate by analysts was near 9 cents. You can't use Amazon's mean estimate as an accurate barometer. The analysts' estimates ranged from a loss of 29 cents, up to a profit of 38 cents. This means two things for investors trying to gauge what 18 cents means in relation to the mean estimate of 9 cents. Taken as a whole (using a mean or average), the analysts had no clue what Amazon would report. Sometimes a mean or average is valueless in providing a useful number. There is no edge gained by using the mean of 35 analysts with estimates from negative 29 cents up to a positive 38 cents. Amazon's estimate was worse than trying to tell time from a broken clock. At least a broken clock is correct two times a day. An estimated number is valuable for comparison when the estimates range is small and typically provides a reliable consensus. You're better served using the whisper number or an earnings preview from someone you trust to gain an understanding of how investors may react to any given result. Secondly, in response to Amazon's 18 cents in earnings versus a mean estimate of 9 cents I have one thing to say. WHO CARES? 18 cents is notable for an earnings result if your company is BlackBerry ( BBRY) or Sprint ( S), but when your stock is trading for $275, 18 cents doesn't pay for the tip much less the meal. That 18 cents represents an earnings multiple of nearly 400, and in order to justify buying at this price you have to believe a PE over 400 will remain reasonable. Piper Jaffray Senior analyst Gene Muster, an analyst you want to pay attention to, summarizes the investment bull thesis in this video "Amazon: It's a No-Brainer to Own, Says Munster" by stating "We believe there needs to be the hope of margin expansion, not actual margin expansion."
In other words, the SS Amazon may continue sailing along placidly without profit until someone decides hope is not enough. Without tangible results, Amazon shareholders rely on the hope of others to come along and prevent the bubble from bursting (sounds a lot like a game of musical chairs). By increasingly relying on revenue and profits in low-barrier, entry digital products and the expansion of near-delivery fulfillment centers (aka pseudo-retail), I find it incredibly easy to visualize Amazon's shares losing half their value at stomach-turning momentum from the slightest investor shift in expectations. At the time of publication the author had no position in any of the stocks mentioned.Follow @RobertWeinsteinThis article was written by an independent contributor, separate from TheStreet's regular news coverage.