If Apple's a Sell, the Stock Market Stinks

NEW YORK (TheStreet) -- The other day, Andy Hargreaves, an analyst at Pacific Crest Securities, provided a sane reason to explain what amounts to stock market insanity when he said, in a nutshell, his firm will downgrade Apple (AAPL) stock if the company underwhelms at its Sept. 9 event. For a review of Hargreaves' sane explanation of the insane, see Laurie Kulikowski's roundup of Wall Street sentiment on AAPL.

Plainly speaking, if Apple underwhelms on the 9th (and it seems Hargreaves skews in that direction), you, according to the aforementioned firm, should sell the stock. Whatever iPhone 6 ends up being won't be enough. Same goes for the iPhone 6 upgrade cycle and ensuing 2015 lifecycle. An iWatch. Mobile payments. None of this will matter unless it adds billions of dollars of revenue to Apple's bottom line.

Others on Wall Street aren't as dour. TheStreet's Chris Ciaccia published a piece summarizing another analyst's take that the prospect of mobile payments makes AAPL shares a buy. But since nobody really knows what Apple will announce or do until Apple announces and does it, I don't want to spend time comparing and contrasting bearish and bullish takes. At the moment, the most constructive learning experience for investors (and thinking humans in general) comes from consideration of the bearish stance.

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While I'm not quite as fired up about iWatch, I'm on record as saying iPhone 6 will crush Apple's own record of 51 million smartphone units sold in a quarter (Q1-2014). Just imagine if I'm correct and that happens in Q4 of this year and/or Q1 of 2015. If Apple sells 52, 55 or, who knows (?), 75 million iPhones in a quarter. Or if it does something similarly spectacular on the back of a massive smartphone consumer upgrade cycle, as well as the larger screen (and other features, such as mobile payments and, possibly a 128GB option) that will prompt many Android users to make the switch to iOS, just as so many Windows PC people have to Mac. Imagine if Apple beats the world in a big way with iPhone 6.

That, if we put any stock into what this Hargreaves character is saying, wouldn't matter with respect to the stock. Apple's past performance doesn't provide it with any street cred whatsoever to believe that whatever else comes down the pike will move the needle enough to move the stock.

That's scary. And depressing.

But, beyond that, and even worse -- what kind of sick expectations do we -- or at least the bears -- have for Apple? It has come to a point where we no longer simply hold Apple to a higher standard, we hold it to an unrealistic double standard. Because Apple is the most successful consumer products company -- steeped in technology and design -- on the planet, we expect exponentially more from it than we do from its peers. Apple must hit two or three home runs for every inside the park shot, say, Netflix (NFLX) or Pandora (P) legs out.

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If you're an investor who also happens to be an Apple fan, this is the point in the conversation where you have to stop pumping your fists and check in with reality. I started to form this point in July's You're Probably Better Off Buying Amazon Stock Than Apple.

Since that article, by the way, Apple is up just 0.5%, while Amazon.com (AMZN) continues to recover, adding 6.8% over the same period. That's telling because, as big as Amazon's opportunity is, it's got nothing on Apple with respect to more subjective matters such as opportunity or concrete measures, particularly profit. But Amazon prompts more confidence these days, probably because it has Jeff Bezos and Tim Cook still hasn't been able to completely shake Steve Jobs' shadow.

So, for as crazy as it is to think that AMZN, fresh off of a lackluster quarter, is outperforming AAPL ahead of this huge Sept. 9 event, it is. By similar tokens, over the last two years, NFLX has tacked on roughly 754% in upside. P passed $40 after being left for dead. It's difficult for lots of people, particularly AAPL fans, to make sense of these moves and/or ascents when they look at AAPL's roughly 2.5% return in the last 24 months.

But you have got to set emotion aside, consider the case somebody such as Hargreaves makes and lend credence to the seemingly irrational. The stock market is not about what you think is right or the way you think things should be. It isn't about rewarding Apple for being best in breed after all these years. It's about momentum and trends that have no basis in anything other than the group mentality that keeps the momo alive.

In other words, don't fight the good fight for Apple. Buy the stock if you really think it's going to go up over the long term. But don't buy it simply because you think it should go up. Don't buy it out of spite for what you perceive as injustice. Don't buy it to take a stand against the AMZN's and NFLX's of the world. In today's often irrational stock market, that's a perfectly irrational way to lose (or at least miss the chance to make) a lot of money.

Read MoreDon't Forget Why Apple Fans Love iPhone

That stinks. No doubt. It stinks as bad the stock market I describe -- at least as it pertains to these battleground stocks. But it is what it is. And now might be the best time to realize that, especially if you're an Apple fan about to get caught up in euphoria that could fail to re-inject life into AAPL shares.

Follow @mynameisrocco

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola writes for TheStreet. He lives in Santa Monica. Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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