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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Rob S. who wrote (10859)	7/19/1998 9:04:00 PM
From: Alomex	Respond to of 164684

I think that in five years Amazon.com will be lucky if they are making 5% net margin and 1.5% net earnings. If I remember correctly, brick and mortar bookstores have historical margins of 3%, in that context even 5% sounds large.

To: Rob S. who wrote (10859)	7/19/1998 9:41:00 PM
From: llamaphlegm	Respond to of 164684

Rob S.: Sorry but you will not be the recipient of a response with nearly the same level of vivid and hopefully humorous imagery as Alomex was. In any case, I concur 100%. The future, so far as I can tell is in portal-linked bots. RE: Stock price. Uh, horse's ass. No way, imho, that this company will warrant $60/share. No flipping way. Any time I screw around with assumptions and try to get a spreadsheet sheet to shoot out a valuation, the result makes me laugh. Any type of semi-rational industry/competitive analysis results in the same. These guys are in an industry growing between 0-2%, hell toss in CDs (with over 600 on line retailers (check ktel's most recent 10Q), software, and why not cigars, toys, wine and virtually anything else you'd like (it will only exacerbate the company's gusher of bleeding) ... it just don't work. Also, this stock market is even more priced for perfection than the past few years. Using a CAPM approach (problematic to be sure) on the S&P500, you find out that the risk premium on stocks over the risk free rate, has hovered around 1-2% over the past year or so. That's how much extra you get paid to assume equity risk. Internet mania, could it go higher, yeah, anything's possible, but I sense serious stalling here, particularly with the backlogged IPO calendars of Investment Banks, hot and momo money will chase the latest fad and then dump it. More generally, rates historically low, P/E s at historical highs (related of course, as P/E = D/E --- k-g as rates drop, k drops lowering the denominator and thus raising the entire term (quickie review of some corp fin for those who would not understand why that would be), how much more good news can there be? South East Asia, Russia, tight Labor markets are laughed off. Japan bumbles along, China sits ready to devalue. At some point things blow off. That's all medium-long term. Short term, I'm frankly torn. Bullish 1. More lunatic, errrr, retail fools (lower case only, as even the upper case ones are getting vertigo at these prices), buying on news of high growth in revenues and hits, and possible stock split redux. 2. Blow out unreal Q2 #s. When I slam dunk or donkeys fly (the latter's more likely, but I digress). They clearly spoon fed analysts the numbers so that they could beat them nicely, but they'd alieanate their most important ally if they guided them too low. Bezos may not be the brightest retailing mind, but he's a hedge fund vet and knows how to play the street. 3. Buyout of EGGS. This I fear. If they buy out some other piss-ass etailers, as they did a couple of months ago, who cares. Meaningless. But a buyout of another company investors are gaga over, that's different.