Michael,
Young companies from a new business cycle slaughtering old ones from previous
times. Digital to IBM, then Compaq and PC business to Digital, etc.
There is no way for the "old" ones to survive.
I agree that tne newer companies have dynamics that make it difficult
for the larger ones to follow. However, in the example you cite,
above, it was IBM that innovated the PC. Unfortunately, IBM suffers
from the "Xerox effect", showing the ability to innovate (at times),
but not the ability to captiablize. Still, IBM stands today,
and Digital has been absorbed by Compaq, so I'm not sure DEC is the
best example.
The main thing that bothers me about AMZN is its financial structure.
Negative shareholder equity, and a huge junk bond overhang is seldom
great for longer term returns on a stock. EPS estimates continue
to be lowered on AMZN, and the analyst ratings are coming down as
well. If that's the trend over the course of the next year/two,
it won't be good for longer term investors in AMZN.
You've mentioned that you're holding AMZN from the $48 level.
Congratulations on your good timing, and your determination
to hold this stock, even when it hit $140/share. My concern
is for new investors, who may be buying at 100+ ... I think
they're very late, and the odds are that they'll be sitting
on a big loss in a year/two as the facts become clearer. In
the meantime, AMZN is one heck of a trading stock, and creates
some really interesting point and counterpoint discussions. |
