Hi Glenn D. Rudolph; I read the Barrons article too. What was missing was any numbers. They said that they valued AMZN as several discrete companies, but they didn't say anything about any of the numbers they used. Not the cost of funds, nor how much they expected each business to grow in the future or anything else, really.
The article was also filled with crap thinking. For instance, they said that the Internet companies are only 6% of the US market, and that if the Internet becomes a big part of the economy, surely 6% is too little. This is crap thinking for several reasons. First of all, 6% is not a little part of the economy. Secondly, if the internet does become a big part of the market, it is not obvious why that big part shouldn't be split up by companies like Walmart that are already big.
The fact is that I've been using the internet for business for years, almost every day, in order to download descriptions of integrated circuits, check for pricing and availability, and even to order parts. But you don't see any of the companies who's web sites I deal with listed as "internet" companies. Instead, marshall.com and the other distributors are still just electronics distributors. Most of the impact of the internet is like this, invisible. The reason it isn't hyped to the crowd is that the crowd doesn't have to buy chips, and so doesn't have to deal with Marshall Industries.
In essence, the article all boiled down to the usual feel good crap. I doubt that it convinced anyone who has not already put his money where his brains are.
-- Carl |
