The problem with that is that I remember Bezos in the late 90’s saying something like “I appreciate the faith investors have in us, but our stock is overpriced. We are just a bookstore after all!” If that wasn’t starting out as a one-trick pony, I don’t know what is!
Well, there’s an interesting back story on that. Henry Blodget wrote how Amazon’s CFO in the late 1990s, Joy Covey, called him up (https://www.businessinsider.com/joy-covey-2013-9/lightbox?r=… ):
Amazon’s spiking stock price, Joy explained, was causing problems at the company. It was distracting employees, who were spending their days obsessing about the stock price instead of Amazon’s customers. It was making recruiting difficult, because Amazon stock options were losing their attractiveness to would-be employees as the stock shot ever higher. …
I protested to Joy that I had merely said what I had thought we both agreed on — that Amazon was a great business that would be worth a whole lot of money some day.
“Yes,” I remember Joy saying. “Someday. But now all anyone is thinking about is today.”
So, perhaps Bezos public comments were of a similar effort to keep a lid on things and not his true opinion of the company’s worth.
Knowing in advance who will become a conglomerate company like amazon is not an easy assignment.
I completely agree. But, perhaps we can get clues from the past, including identifying great management. Bezos knew they weren’t going to remain just a bookseller (the arrow from A to Z in AmaZon hints at selling everything from A to Z), just as Reed Hastings named the company NetFlix instead of NetDVDs because he anticipated streaming. I do think AWS was a surprise to Amazon (it was developed for in-house development optimization and then sold as a service to other companies during the 11 months of the year that Amazon didn’t need all that server infrastructure), but again, great management is the key.
Which of the companies we own today have similarly great management AND the opportunity to expand into new markets? Looking back, the grand-daddy of SaaS stocks, Salesforce, managed to have continual success, with AppExchange, Apex, Marketing Cloud, and Einstein (AI). Does Alteryx, Data Dog, Crowdstrike, MongoDB etc. have the management and opportunity to expand? One of the frustrating things with Nutanix, for instance, was that the company was seemingly well positioned to lead a unification of public and private cloud services, but management just totally blew it. Do our current companies have both the management chops and expansion opportunities?