This is my first post on SI after following this and other threads for some time.
I have found this thread to be extremely interesting. I am in college and still learning about how the markets work (plus playing with a bit of money, $8,000 , I have saved up from my job) and I must say I am somewhat concerned that I am missing something.
All of the short arguments seem to make a great deal of sense regarding AMZN. In addition to not even being a true portal, they are selling items that, seemingly, have very little profit potential. In other words, selling internet advertising for massive profit (at least based on cost to set up a site) or selling software products that have large profit margins may justify high valuations, but I can't understand for the life of me why selling books and CD's justifies this kind of valuation.
I guess my question is, are people really buying this because they really believe AMZN will some day make massive profits or are they buying it simply because it is "going up" or because "PE doesn't matter with internet companies"? Also, I would be interested in knowing if any traders on this board have profited from playing the "irrational" side of trading, which logically would seem to fit AMZN. (What I mean is, rationally AMZN is overvalued but who is to say that people as a whole are rational?)
Thanks in advance. I appreciate almost all posts on this thread, especially Greg who I have learned much from. I also appreciate the (generally) professional posts on this board - reading Yahoo posts are like reading comments from five year olds at times.
Good luck to all. |
