Your arguments have some merits, but just as Glenn noticed, he had similar views regarding Amazon LAST YEAR. What has changed?
Yes, profitability is important. The sentiment on Wall Street has changed, and Amazon seemed to have realized that. It has invested in drugstore, pets, etc. It's also rumored that Amazon is going into toys, consumer electronics, etc. Its Auction business gradually takes up volumes, and it also will launch a site with Sotheby's soon.
It's no longer a bookseller. Speaking of that, I used to live in a small upstate New York town where there is no B&N, Borders stores, only small independent booksellers. The nearest Borders is in another town 1 hour away. People would rather order online than to drive 1 hour and may find the store does not have the book in stock?
Have you used Drugstore.com. I find it very convenient. The product information is all there. For my regular non-prescription medicine, beauty needs, I have gone to a CVS, Rite Aid etc after I checked out
Drugstore.com's excellent service.
I couldn't guess much of the tax implications. People in Seattle or Washington state already have to pay tax ordering from Amazon. Will Amazon have much fewer customers there than in other states? A lot of factors there, not just couple of extra $$$ saved.
E-commerce is here to stay, just like Biotech. There are going to be only a few winners. Amazon is one of the promising winners.
However, I don't know if Amazon is overvalued or not. I don't know what its fair price should be. Again, a lot of factors affect the share price---
No position in Amazon; Would have bought recently if I have money.
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