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To: Chuzzlewit who wrote (303)	4/8/1999 3:26:00 AM
From: Joe E.	Read Replies (2) \| Respond to of 419

"The point both the Fool and I agree on is that AMZN's business model allows it to rapidly generate cash while showing negative earnings because it uses cash from suppliers and customers to fund its growth. If I am correct (and I am virtually certain of this), AMZN must either grow or die. " This is not a refutation with respect to Amazon, but... Conceptually I think one can continue in business with "losses" without growing so long as the timing of the cash flows is sufficient. Suppose I get 30 days credit from my supplier and collect on the sale in 15 days. I get 15 days use of the money. If I make 7% on the money per year, this is about 0.3% for each 15 days. My other costs can exceed sales by $3 per $1000 of sales and I can stay in business forever. BTW, this is exactly what insurance companies do, when they have a combined ratio of over 100. Nobody makes a big deal of them living off of the investment of premiums (sales), since it has been going on for centuries and is well understood and accepted in that context.