Tom:
You're a worthy bull with whom to spar and exchange ideas in that you actually contemplate the other side of the argument rather than just dismiss it and use opposing arguments to strengthen your own.
1. Porter's book is a must read for any investor -- it really forms the basis of analysis for any equity analyst, consultant etc.
2. I agree -- skill or luck? Who the hell knows, but the hubris which seems to overwhelm investors who hit a winning streak is amazing. How do you know you were "right?" You just happened to be ahead of a market concensus which may be right or wrong. And, if you are ultimately "right" long or short, but screw up the timing, you could be bankrupt in the interim. I'd rather be wrong, lucky and rich than right, unlucky bankrupt. Unfortunately, I'm constitutionally incapable of betting or investing on manias which my own analysis concludes have no bearing to reality. This is one of them. It does not help me predict stock price movements short term -- too bad. it DOES let me see emerging trends -- sometimes. I and and number of bears here were discussing months ago -- ultimate market size limitations, the emergence of shop bots and its impact on margins, the use of bots and malls by portals and the impact for end-merchants/retailers, the importance of price for some consumers, the fact that other than inertia/first mover advantages, every other alleged advantage amzn enjoyed -- technology, community, etc. was replicable. TMF ridiculed these arguments. Now, as amzn buys junglee it touts amzn as a portal of commerce. We similarly discussed the advantages of both physical and internet shops (glenn and others predicting that amznwould have to open eral world stores if it were to be survive in the future), the growth of inventory, etc. So far, the market says that we are still wrong. The future? Don't know.
On consigment, Glenn is the expert on the increase of inventory, but amzn's has been growing rapidly. More threatening, seems to me to be, the utter lack of need for any reatiler -- that's strictly a retailer -- on the web. I, end consumer man, use my bot, enter my credit card once and shop. If all of my purchases are through one or two brand name bots that i come to trust -- walmart, shopping or buy.com, yahoo, aol whatever, I personally could not care less which site I bought it from. I don't need to buy from amzn any more that I need to buy from barnes, if I want to read a review -- I can just read it there (and do you really think that amzn's content is not replicable or that amzn which has less freee cash flow than ANY ONE of its major competitors in ANY ONE of the 3 industries in which it competes, will really be able to fend off EVERY ONE of them in EVERY INDUSTRY simultaneously as they ALL ratchet up their spending???)
RE; Ingram -- my own guess is that it will go through (BK is 12% of the market and there are other wholesalers). Let's assume however that it will not. One, it means that amzn probably cannot buy a wholesaler (or if it tries, bks will tie it up for years it court), so amzn still incurs serious inventory costs. Two, it frees up millions for bks for other acquisitions and/or more costly associate programs.
Finally, this post is from tmf and i believe it exemplifies a fair number of the smaller investors in amzn. If it does not utterly terrify you, it should.
<<<I just did the opposite. I bought at 137 on Tuesday just after it reached 140 and touched down to
136 and then went up again.
I bought it just because Amazon announced they would sell DVD's in addition to books and CD's.
I don't believe in traditional valuation method. All I know is that when AMZN announced they
would sell CD's a few months aho, their stock price tripled within a month. Now that they are
going to sell something else very big: DVD's, their stock price should go up too. Maybe double if
not triple within a month? My prediction id it will double sometime in Jan 99. AMZN = $240 in
Jan 99.
As far as market cap goes, AMZN is valued less than 10 billion right now, when its cap exceeds
IBM which is at 140 billions, that should be the end of the bull run of its stock price. Then AMZN
stock should perform like a blue chip, just like IBM.
Market CAP: YHOO 15 billion, AOL: 35 billion, AMZN 10 billion. All these three companies will
have market cap over 50 billion dollars (comparable to CPQ, G, HWP) in a couple of years.
AMZN is the future wal-mart(160 Billion) on the internet....
Steve>>>
PS Tom, please check your inbox. |
