AMZN - 2nd thoughts

For anyone enthralled by Amazon’s (AMZN) skyrocketing AWS business (see this glowing TMF report…) or encouraged by Saul’s move to open a position in AMZN shares, I can highly recommend mungofitch’s thoughtful Post of the Day on how AMZN bamboozles the investor. Remember that the CEO, Jeff Bezos, is a computer and math whiz who graduated from Princeton U. in computer science and electrical engineering summa cum laude. It seems he is equally adept at data crunching and financial engineering:

“But it’s not what anyone sane would consider to be free cash flow if they read the details.

Amazon is egregiously, specifically and purposefully both structuring their business operations and their reporting to hide costs, in order to misleadingly flatter their Metric W (what they erroneously dub “free cash flow”), which is not coincidentally the metric they say they should be valued on.”

It is well worth reading the entire post. To those who are new to the TMF boards, Jim, aka as mungofitch, is one of the best and brightest in Fooldom. Here is his PoD:…

sold AMZN long ago


Sold all my Amazon about 6 months ago, and wish I hadn’t. Other investments I made with that money have not done nearly as well. It’s just a high profile popular stock and investors don’t seem to care about their peculiar financial reporting practice, so long as the reports continue to show amazing growth.