The math behind their current stock price certainly is strange. Really speaks to a best case.
I still love Amazon, and am in a state where they charge sales tax.
I have a prime account and my shopping experience with them is fantastic.
Twice in the last few months I've gone to a local sporting store to buy something--wasting time and gas--and it just hasn't had it. I literally had to go to Amazon, where the same item was much cheaper than the sold-out one at the Brick & Mortar, and with prime I've got 2 business day shipping on virtually everything.
Add to this their customer service, which has always been quick and very good to me.
To me Amazon has a massive selection + great prices + very short shipping time.
They aren't perfect, though. I think that stock price is silly.
I've often used Amazon to sell things. I'm not a seller, but if for example I have a camera I no longer need and don't care much about what I get for it I can list it on Amazon and have it immediately at the top of the list (if I'm the cheapest there). Much quicker than Ebay.
Don't forget that Amazon pays 4% to 6% (or higher) commission to affiliate web sites on an entire order (if the visitor clicked on an affiliate link to Amazon, then everything they order after that until they check out counts towards the commission!)
I don't know what percentage of Amazon sales come from affiliate links. If that percentage is low, then I suppose it's not much of a dent. I don't see a breakdown of affiliate commissions in their annual report... they lump those expenses in with "marketing".
Frankly, I don't know how they make any money at all. But they're still around. Go figure.
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When I hear central bankers are blowing bubbles, I like to picture a large, happy and well-endowed male chimp named 'Bubbles'...
its also why unless the people that look down upon and have the nerve to find a person guilty of tax evasion have paid eery penny of use tax from everything they have ever bought from a catalog or the internet, are complete fukking *******s and another reason why this country is doomed
One of my neighbors (long time ago and in a different city) said: "I can't understand how they can get a jury to convict *anyone* of 'income tax evasion'" -- and this guy was no libertarian, he was an aging retired CHP motorcycle cop -- but even he sensed the irony of living in a country of 'free people' where juries allow the government to put their fellow man behind bars for such a thing.
The politics of envy and class warfare (and our Prussian-inspired public education system) have transformed killed the American spirit. This is the problem that must be addressed before we can hope for true freedom.
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When I hear central bankers are blowing bubbles, I like to picture a large, happy and well-endowed male chimp named 'Bubbles'...
Twice in the last few months I've gone to a local sporting store to buy something--wasting time and gas--and it just hasn't had it. I literally had to go to Amazon, where the same item was much cheaper than the sold-out one at the Brick & Mortar, and with prime I've got 2 business day shipping on virtually everything.
I think people discount this a bit too much. It's hard putting a price on my time, but I'd rather not spend it driving around to (or calling) stores to find out if they have what I need. If it's not a critical, same-day need, I'd really rather have it show up in a brown truck even if I might find it competitively priced at a store. Add in the cost of driving and it's pretty compelling -- I'll spend a significant fraction of time online that I would have spent driving, and still feel that I've come out ahead. This may be a bigger factor than one might think.
If you live in a rural area, this becomes an even larger consideration. I can't imaging a two-plus-hour round trip to a tech superstore to get something that just isn't in stock in my town. If I have to special order it, I might as well get online and do it myself. (This goes for car parts as well -- lately I've noticed the local car parts stores don't carry parts for my cars, they have to special order them more and more -- then I have to drive to the store to pick them up when they arrive.)
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Amazon's stock price may be a reflection of too much money looking for 'quality' (safe and profitable) investments. The minute Amazon falters, the stock will start to tumble because the illusion will have been destroyed and the money will be redirected to the remaining 'quality' investments.
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When I hear central bankers are blowing bubbles, I like to picture a large, happy and well-endowed male chimp named 'Bubbles'...
I'm already short Amazon, but more for the ridiculous PE level, I personally think its a great company but its not going to fail anytime soon, I just believe that the market will gradually start to reassess these Momo stocks, we have had FSLR, FB, Netflix, Priceline, etc etc. I see a gradual reduction in price for this reason and obviously any further earnings miss would greatly increase this move.
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“The problem with socialism is that, sooner or later, you run out of other people’s money.” Thatcher
Saw this on CNBC yesterday and have just found the clip " you would have to be drunk to buy Amazon" Robert Olstein.
"back down to a hundred bucks"
Interesting arguments, but seems to love Cisco, BBY, Macys, Agilent. However after making all these points he then says he sees the S&P at 1600 next year!, though unlike the usual uberballs CNBS roo out ,he has a lot of caveats. Doesn't seem like a nutjob, any comments on his Cisco call?
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“The problem with socialism is that, sooner or later, you run out of other people’s money.” Thatcher
Mrbill
Posts: 7857
Incept: 2008-10-19
North Carolina
I think las made a good point. They're spending a lot of money right now on their R&D and infrastructure. I know their margins aren't much, but they're still investing.
Obviously I'm not getting long AMZN but if you are holding here, you probably think those investments will make money in different avenues with higher margins.
And the biggest problem of all for Amazon .... their biz is primarily an online website. With a good plan and funding a person like me, Karl, and many others here and elsewhere could come up with a better mousetrap to attract the good disgruntled suppliers. There is plenty of empty warehouse/retail space in the USA to setup alternative distribution networks + the USPS, FedEx, UPS, etc. to make up the difference wherever places aren't available for a distribution network.
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3/17/2013: Bullish on nothing - 100 percent in cash.
Aztrader
Posts: 6650
Incept: 2007-09-10
Scottsdale, AZ
Just ran into a friends wife that works for a company supplying boxes to Amazon in Arizona. I asked her if business was still robust, and she told me that they are still selling a ton of boxes to Amazon, but in the past couple of months, they have been much smaller boxes. This probably means less expensive, lower commission products for Amazon to ship. I guess the onslaught of 50 TV's has come to a stop.............
For us married guys, clicking on Amazon can be infinitely faster than hauling down to the store with the wife Though it depends on the exact item of course whether I want mail order or retail store. (Today I ordered a piano primer book.)
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Though it depends on the exact item of course whether I want mail order or retail store. (Today I ordered a piano primer book.)