I bought so much from Amazon this year that they sent me a Christmas present.
I have bought a grand total of one book from Amazon and they sent me a gift, too. Rather wasteful, I thought, given that I have discovered since my one and only purchase that I can buy books elsewhere on the net at a lower price. But then again, this is Amazon.com, and wastefulness has never been an impediment to doing business.
And yet sending coffee containers to everyone who has ever purchased a book from Amazon.com makes sense in its own way. The Amazon.com business model is simple enough: increase revenues (certainly some of the millions of people who received coffee cups will feel obliged to buy their next book at Amazon), even if they cannot manage to make a profit on those sales.
It certainly is easy enough for "investors" to ignore this fact, particularly when we have a few obliging analysts willing to predict that this ship, which is leaking money as if it were a swiss cheese fitted with sails, will five years hence find its way to the harbor of profitability. Only five years into the future, mind you, so these analysts inform us, so why not bid up the price to that future valuation right now. The thinking being, I suppose, that we should avoid the rush.
Of course (and to my own financial detriment) I have a short bias against this company. I cannot imagine Amazon.com turning into a profitable venture five years from now or ever, for that matter (unless they drastically revise their business model). In the meantime, as it is so conveniently overlooked, short-term earnings estimates drift downward with each passing quarter, better to match the true performance of this company.
This is not to say I begrudge those of you have had the courage (if not the sense <8) to go long this company. Were that I had such courage and lack of sense. And I would indeed be a fool to urge you to take your profits now -- you have certainly shown that you know better than I -- but still I have to truly wonder just how much longer this charade can continue. Maybe forever?
Here's wishing all a Happy Holiday season and (for me, as least) a better New Year.
- Peter B |
