Making Sense of the Crash in Amazon Stock

NEW YORK (TheStreet) -- If you require the low down on's (AMZN) quarter, here it is via TheStreet's Chris Ciaccia.

As I write, the stock's down about $30 -- 8.88% -- to just under $308 per share. And I'm getting all of these I told you so emails and Tweets from people who have bet against AMZN all the way up and, misguidedly, on head fake after head fake, down. Obviously, this dive ain't no head fake.

But there's something these cats -- many of whom call themselves "value investors" (whatever that means in 2014) -- fail to comprehend. Long-term investors do not invest within the confines of a boxing match or the up-and-down-the-court Clippers-Warriors NBA playoff game I watched Thursday night. If you're buying and holding stocks for the long-term you're not doing it as round-by-round sport.

So, fine, AMZN bears and shorts win this round. As the kids used to say, #BFD.

If you're long AMZN, let's hope you didn't do it simply to ride the momentum. If you did, sorry, but you sort of deserve any pain you're feeling right now. Momentum investing is not a long-term strategy. It should not comprise any segment of your portfolio other than that percentage you set aside for speculative bets. The size of that speculative allocation depends on the way you stomach risk and your overall financial condition.

The right way to be long AMZN is to have understood the story before the intense momentum kicked in. To have decided that it's the long-term, leave-it-to-your-grandkids stock of our generation. But to do that you had to a.) do your homework months and years ago and, subsequently, b.) buy into what Amazon CEO Jeff Bezos has been selling since the late 1990s!

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