NEW YORK (TheStreet) -- Shares of Amazon (AMZN) have slightly recovered after selling off at the end of January following disappointing fourth-quarter earnings results. The stock opened today at $348.80.
Bears are finally exhaling and claiming victory, as the stock is down about 14% since reporting earnings and down almost the same amount in 2014. So this is the question we're begging to have answered: Is this the beginning of the end, or another buying opportunity?
There's something you need to understand about Amazon and the bears.
They have solid points when it comes to valuation. I mean, the company isn't profitable. Or at least in a meaningful fashion. So for it to trade at an extreme multiple simply makes no sense.
But it's so important to consider who is buying, and not necessarily why they are buying. Valuation-wise, it makes no sense for the stock to be trading so high. At all.
But because people believe in CEO Jeff Bezos and because people believe in the company's long-term success, it continues to squeeze higher and higher, mercilessly torturing the bears the entire way.
Honestly, until we actually see the whole story at Amazon unwind before our eyes, I don't want much to do with the short side of things. I'd rather be long Amazon after selloffs, or flat when shares have gone too far, too fast.
Simply put, the stock has been a beast! Sure, it's off some 14% year-to-date, but there's no reason to fuss about that. Just like there's no reason for the bears to cheer like they've won the Super Bowl.
The stock's up a whopping 449% in the past five years, and 86% in the past three years. That beats the pants off both the S&P 500 ETF (SPY) and Nasdaq ETF (QQQ) in either time frame. Yet the doubters have been making the same argument the whole way up.
Of course I agree that the valuation is completely outrageous. Who wouldn't? But some stocks will continue to trade without any connection to traditional valuation metrics, and that's very important to understand. The market will have its way until it changes its mind, no matter how right you are and how much you fight. You're a drop in the ocean compared to the market's forces. We all are.