Investors don’t shrug off Amazon loss this quarter; stock tumbles 10%
For what it’s worth, I used amazon as one of my examples in the philosophy that started off this board:
* I want management to be interested in making a profit. (That’s why I sold out of amazon even though I love the company. I saw an interview where Bezos touched on a dozen or so goals he had for the company over the next ten years. Making a profit just wasn’t on his radar screen, never even mentioned. (I realize that this has made me miss out on the increase in amazon’s price, but I just wouldn’t be comfortable with it). [Post 6]
I do love the company and buy just about everything there, but as a stock, no.
I want management to be interested in making a profit.
The general compliant against companies are they are too focused on profit and not enough focused on customers. Here is a company focused on customers, delivering services and products at the cheapest possible price and in the process sacrifices profit… and you don’t like it…
Yet you enjoy their services and products. Funny how it works.
The general compliant against companies are they are too focused on profit and not enough focused on customers. Here is a company focused on customers, delivering services and products at the cheapest possible price and in the process sacrifices profit… and you don’t like it…Yet you enjoy their services and products. Funny how it works.
Hi CM001,
I’m happy being their customer. I just don’t want to be their stockholder. I feel there’s an arrogance about Bezo’s attitude: “I’ll just run this company as my hobby and the heck with you stockholders”.
I feel there’s an arrogance about Bezo’s attitude: “I’ll just run this company as my hobby and the heck with you stockholders”.
On this I disagree. The amazon stock valuation is based on Bezo’s focus on growth. I believe he has the investor permission and customer permission on what he is doing.
If investors are concerned about the strategy, that is not reflecting on the price notwithstanding today’s price drop.
If investors are concerned about the strategy, that is not reflecting on the price notwithstanding today’s price drop.
Obviously other investors have been willing to buy or hold, and I was a stockholder too for a while, but no more. Just wasn’t comfortable with a company that had no interest in making a profit.
Saul I read that post carefully after someone nicely put together a synopsis of the whole board maybe a month ago. It made sense to me, however I stuck with Amazon because they are so dominant in cloud computing, which is already huge and is going to be insanely huge as time goes on. The only other big players there are Microsoft and to a lesser extent Google.
But… as usual it turns out you were right. How confusing Amazon’s performance is. They could easily make a nice profit I think. But they choose not to.
Obviously other investors have been willing to buy or hold, and I was a stockholder too for a while, but no more. Just wasn’t comfortable with a company that had no interest in making a profit.
I do not think they are not interested profits. But right now, their expansion is akin to staking claims in the Western Territories.
Amazon’s expansion has been almost entirely internally funded. Turning a profit is a matter of choice for Amazon, not necessity. And currently, they choose to invest in their business because they believe in the future returns on those investments.
With Amazon, what you buy and hold is optionality. Probably more so than with any other of the digital behemoths. Amazon is hatching at least four or five potential multi billion dollar income businesses. Retail, cloud computing, media distribution, logistics, payments. Probably even more than that.
To me, my 3.25% position in AMZN is a bet on this optionality.
All this bearishness on AMZN leads me to believe that it’s time to increase my position.
AMZN doesn’t show profits but they do show cash flow and lots of it - last I checked, investors get paid from cash not profit as defined by an association of bean counters.
Jason
Long AMZN
And who hopes he didn’t offend any accountants