The other day Saul asked what else there was besides crappy accounting for figuring out investments to which I replied: “business model.” Here is an example of an article focusing on the kind of stuff I like to see:
Amazon’s Secret is Out: Six Stunning Facts Before Earnings
Amazon is part of an elite group creating a new era in business, but there are six stunning facts surrounding the firm that could not only affect this earnings release, but much more importantly, drive the future yet higher for the stock.
FACT 1: RESEARCH & DEVELOPMENT
FACT 2: E-COMMERCE
FACT 3: TEENAGERS & APPLE
FACT 4: THE CLOUD
FACT 5: ADVERTISING
FACT 6: CARS WITH SELF-DRIVING FEATURES MARKET
A business that is at the top of its ecosystem is very visible but it does not necessarily have the staying power of a less visible business that is built into the foundations of the ecosystem. A good example might be ARM Holdings vs. Mobileye. I originally saw Amazon as being on top of its ecosystem but this article points out how, in many ways, Amazon actually is part of the base of its ecosystem.
Long small starter position in AMZN