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Do Not Buy Apple Ahead of Earnings (With Video)

Tickers in this article: AAPL AMZN LNKD NFLX
NEW YORK ( TheStreet) -- We might just hit the height of absurdity on Wednesday afternoon.

Apple (AAPL) could report the best holiday quarter in the history of retail, yet the stock could get hit on "disappointing" numbers. I can see the hysterical media headlines now.

I really hate to keep picking on The Wall Street Journal , however, when it comes to Apple coverage, they provide the best high-profile example of what's wrong.

I'll go on CNBC today (Tuesday in the 5 p.m. hour, eastern time) to discuss Apple ahead of earnings. I'm sure Melissa Lee and that strong "Fast Money" panel (it's almost surreal to think I'll share airtime with these people) will question my recent defense of AAPL. And that's all good.

As much as I take a near-term bullish stance, we need to have these conversations about Apple's long-term prospects. They're relevant; in fact, I started them when everybody else was bullish back in April 2011 .

The time has come, however, to moderate critical cynicism. When the WSJ posts headlines like this from Monday, Investors Struggle to Get Handle on Apple , somebody needs to step in.

It's not that the WSJ headline isn't correct; that's exactly what's happening. Insanely, nobody seems to know what to think about AAPL. That's why, if you're a long-term investor and not a nimble trader (like the people you watch on "Fast Money" everyday), you absolutely should not own AAPL at this juncture. (See the video at the top of this article).

As I explained on Monday, relatively "safer," less anxiety-provoking names easily outperformed AAPL over the last year .

That said, how should we evaluate Apple? How do we split our scrutiny between Apple vs. its unwritten future and Apple vs. its largely inferior competition ? That's the ultimate question here.

There's no right answer, but we've tipped the scales too close to the let's consider Apple within the context of the unrealistic expectations it -- and its lack of competition -- set for itself .

Simply stated, Apple deserves more breathing room. We give Jeff Bezos and Amazon.com (AMZN) serious benefit of the doubt. That's because investors see less uncertainty in Amazon as it sets itself up for the long term. Understood. I support the thesis. However, I do not buy the notion that Amazon is a 3,000-to-11 favorite -- using each stock's price-to-earnings ratio -- over Apple.

Now, let it be known, I don't treat valuation metrics like old school market guys. In fact, I no longer think valuation when I see a P/E. I think confidence. How much confidence do investors have in the company's ability to maintain its present and anticipated pace of growth for the foreseeable future? From there, I assess the company's strategic-competitive position to see if I can have the same level of confidence.