NEW YORK ( TheStreet) -- The more feedback I receive from last week's CNBC appearance where I cross-checked a Wall Street analyst for his "thin" and "incoherent" Netflix ( NFLX) bull case, the more I realize, against instinct, I made the correct choice to set decorum aside and situate him in his proper place.These Tweets accurately represent about 85-90 percent of the response I have received:
$NFLX http://t.co/qxcqaGceWf Thx @Rocco_TheStreet for trying to open the eyes of another thick skull unable to support their bull case w/ #s.— Causal Nexus (@CausalNexus) September 7, 2013
@Rocco_TheStreet @CNBC Keep it up...as an FA we need to hear from those that are not "buy" or "sell" side— MATTHEW BROWN (@MB_MSFG) September 7, 2013It's refreshing to hear the sort of sentiment that says it's not about being right or wrong, but how you get to the conviction you run with. Right and wrong, particularly with battleground companies, can be fleeting propositions. The same applies to stocks, but stocks and companies really require two different discussions. It's quite clear that, even when they're right (as bulls are about NFLX the stock), the public doesn't necessarily trust that Wall Street analysts provide a complete picture, let alone the level of rigorous analysis we should expect from them. I have already established that Barton Crockett of Lazard Capital Markets had some nerve referring to my points on Netflix as "thin" when his were vague and imprecise generalities and lofty predictions supported by leaps of faith rather than logic. It's important to drill down to just how flimsy the core of his NFLX "bull case" is. Consider this 31-second segment that sums up Crockett's contention that we should treat Netflix like companies that command high margins such as Time Warner's ( TWX) HBO and big media conglomerates Viacom ( VIAB) and Discovery Communications ( DISCA): As I have repeated over the years -- and more so recently -- there's a valid bull case to be made for Netflix, the company. I don't buy it. I don't believe in it. I constantly counter it. That, however, doesn't mean it's wrong. If the assumptions people make about Netflix, the company, pan out, the magic carpet ride the stock has ridden will prove to have been a time machine. That said, any way you slice it, Crockett's margin argument makes absolutely no sense. Let's deconstruct it as clearly and simply as we can. Crockett tells us that because Netflix does original content and some exclusive programming it's a TV network in the spirit of HBO or the entities that operate within Viacom, Discovery and such. As an aside, many Netflix advocates claim it's just the opposite of a traditional television network because of its delivery mechanisms, on-demand nature and so on. With Netflix, you apparently can have it both ways.