lla, this is a classic example of industry analysts having their view so screwed up that aren't worth anything. sure, cost structures may be lower on the net. micron tech's cost structure is much lower than in 1995, yet they lose $100s of millions now instead of minting $100s of millions.
it isn't the cost structure, stupid analysts,it is macro supply and demand.
what impacts macro supply? nothing more so than outrageous valuations. look what happened to micron. they were supposed to earn $17 a few years back. instead, their stock traded at $17 - down from $95! ;-) why? they were minting money and their stock was richly priced. on the net, one need not mint money to be richly valued ;-) however, everyone and their uncle will be on the net in two years, as they are making plans to get in on the good times right now, and the supply of offerings will smother the new demand, imho. well, maybe not smother it b/c demand is growing rapidly. however, it will greatly reduce the profits that these companies will bring home as they will be forced to compete on price.
where is amzn's cost reduction? is raising the book price the only way for them to make money? of course, that, in and of itself, will reduce demand...
anyway, not wanting to interrupt alice in wonderland too much.
amzn trades with the market. it has an explosive alpha... |
