Amazon Stock - Can this giant be stopped?

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bg5
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Amazon Stock - Can this giant be stopped?

Post by bg5 » Sat Feb 03, 2018 11:29 am

Hey Gang,

Previous lessons have taught me to invest in the Indexes and avoid individual stocks. VTSAX is 80% of my portfolio and will continue to be so. I dont ever plan to invest in individual stocks but one stock that I enjoy tracking is Amazon. I have not plans to ever purchase this giant but it is fun to see the run AMZN has been on the last decade.

As our society changes I wonder how this giant could be stopped. It appears to me that more than ever the younger generations like to purchase things online and there is nowhere better to shop than Amazon. Their customer service is outstanding as I have had a few issues in the past and those were fixed in a few minutes with no wait times. Now Amazon appears to have a strong position in the Cloud technology and with the purchase of Whole foods they are jumping into another interesting category. To me this stock has the long term potential to be the largest percentage in VTSAX. I would assumed in another 10 years Amazon will be on levels we have never seen before.

I wont buy it but I think this stocks price will be a solid indicator of the U.S. economy. Any thoughts on Amazon as a company and its potential for the future?

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simplesimon
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Re: Amazon Stock - Can this giant be stopped?

Post by simplesimon » Sat Feb 03, 2018 11:33 am

1) See nisiprius's thread about GE stock.
2) Government will likely play some role.

Bacchus01
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Re: Amazon Stock - Can this giant be stopped?

Post by Bacchus01 » Sat Feb 03, 2018 11:48 am

The premise of “there is nowhere better to shop than amazon” is a big overstatement.

I still buy some on amazon, but I buy a lot from other online places.

Pet supplies. Chewy.com

Supplements: bodybuilding.com

Electronics: Walmart or Bestbuy.com are now often cheaper and I can return right to store

Groceries: nothing beats Costco and my local Walmart

Shoes: Zappos.com. Customer service there is amazing

Work clothes: I just bought a bunch on Macy’s.com and often from josabank .com sight

aristotelian
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Re: Amazon Stock - Can this giant be stopped?

Post by aristotelian » Sat Feb 03, 2018 12:05 pm

Amazon has pretty much colonized the entire retail sector. At some point there must be a limit. Plus it is still barely profitable after all these years.

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Tycoon
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Re: Amazon Stock - Can this giant be stopped?

Post by Tycoon » Sat Feb 03, 2018 12:09 pm

The short answer is of course it can be stopped.
Appeal to Pity:When pity is envoked to support a statement | Appeal to Popular Sentiment:Appealing to unrelated prejudices and attitudes | Hasty Generalization:Too little evidence to support the conclusion

TrueInfinity
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Re: Amazon Stock - Can this giant be stopped?

Post by TrueInfinity » Sat Feb 03, 2018 12:10 pm

Bacchus01 wrote:
Sat Feb 03, 2018 11:48 am
The premise of “there is nowhere better to shop than amazon” is a big overstatement.

I still buy some on amazon, but I buy a lot from other online places.

Pet supplies. Chewy.com

Supplements: bodybuilding.com

Electronics: Walmart or Bestbuy.com are now often cheaper and I can return right to store

Groceries: nothing beats Costco and my local Walmart

Shoes: Zappos.com. Customer service there is amazing

Work clothes: I just bought a bunch on Macy’s.com and often from josabank .com sight
Amazon owns Zappos.

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Re: Amazon Stock - Can this giant be stopped?

Post by Horsefly » Sat Feb 03, 2018 12:14 pm

aristotelian wrote:
Sat Feb 03, 2018 12:05 pm
Amazon has pretty much colonized the entire retail sector. At some point there must be a limit. Plus it is still barely profitable after all these years.
$1.9B in profit for one quarter doesn't sound to me like "barely", but I get your point.

The only individual stock I've owned for the last several years has been Amazon. After my investment doubled I took out what I originally put in, so I'm now playing with the houses money. Since then it is up another nearly 50%. The whole time the analyst consensus has been pretty bearish. I think Amazon keeps making pretty good decisions, and disrupting everything they touch. At some point they will probably be on the other end of a disruption, but I don't think that is going to happen soon.

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Re: Amazon Stock - Can this giant be stopped?

Post by LadyGeek » Sat Feb 03, 2018 12:19 pm

This thread is now in the Investing - Theory, News & General forum (stock).

TrueInfinity, Welcome!
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The529guy
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Re: Amazon Stock - Can this giant be stopped?

Post by The529guy » Sat Feb 03, 2018 12:23 pm

At the end of 2017, Amazon was 1.7% of VTSAX, its fourth largest holding.

Maybe more now?

broslami
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Re: Amazon Stock - Can this giant be stopped?

Post by broslami » Sat Feb 03, 2018 12:35 pm

Amazon is a good chunk of my portfolio

It's best play in tech currently

Valuing Amazon on EPS is missing the point,it's all about revenue + growth.

I don't see it being stopped. Despite run up is still a good buy that you won't regret in 20 years.

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Re: Amazon Stock - Can this giant be stopped?

Post by Toons » Sat Feb 03, 2018 1:20 pm

I like the way Amazon was described a while back by someone
Cross between a Cheetah and an Elephant

"Cheetelephant"



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Re: Amazon Stock - Can this giant be stopped?

Post by TheHouse7 » Sat Feb 03, 2018 1:25 pm

I agree that government will play a key role in anything being "stopped".

I love the story of standard oil, and how now companies are becoming more and more consolidated. Capitalism works the "best".
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

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Pajamas
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Re: Amazon Stock - Can this giant be stopped?

Post by Pajamas » Sat Feb 03, 2018 1:34 pm

I don't know if it can be stopped but lots of other companies are trying to stop it. Amazon is always looking for new ways to compete. If they don't think they can win, they know when to throw in the towel and move on to something else. It's hard to believe that Amazon has only been publicly traded since 1997.

Jeff Bezos always includes a copy of the first annual letter to shareholders with the current one. If you haven't read it, you should.

https://www.amazon.com/p/feature/z6o9g6sysxur57t

tibbitts
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Re: Amazon Stock - Can this giant be stopped?

Post by tibbitts » Sat Feb 03, 2018 1:35 pm

Well, Amazon is still primarily retail, so... would you have said Sears could have been stopped back when it was selling motor vehicles, houses, and almost everything else people needed?

TravelGeek
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Re: Amazon Stock - Can this giant be stopped?

Post by TravelGeek » Sat Feb 03, 2018 1:48 pm

broslami wrote:
Sat Feb 03, 2018 12:35 pm

It's best play in tech currently
I thought they were a bookseller. Or, sorry, an etailer. Or, retailer. Or delivery service. Or freight airline. Or movie/film studio.

Or maybe all of the above? Granted, they use technology (like anyone else) and develop and sell some technology services (AWS), but does that make them a pure tech play?

Dottie57
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Re: Amazon Stock - Can this giant be stopped?

Post by Dottie57 » Sat Feb 03, 2018 1:48 pm

broslami wrote:
Sat Feb 03, 2018 12:35 pm
Amazon is a good chunk of my portfolio

It's best play in tech currently

Valuing Amazon on EPS is missing the point,it's all about revenue + growth.

I don't see it being stopped. Despite run up is still a good buy that you won't regret in 20 years.
Revenue and growth with limited profits - what good is it to an invester?

limeyx
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Re: Amazon Stock - Can this giant be stopped?

Post by limeyx » Sat Feb 03, 2018 1:53 pm

bg5 wrote:
Sat Feb 03, 2018 11:29 am
Hey Gang,

Previous lessons have taught me to invest in the Indexes and avoid individual stocks. VTSAX is 80% of my portfolio and will continue to be so. I dont ever plan to invest in individual stocks but one stock that I enjoy tracking is Amazon. I have not plans to ever purchase this giant but it is fun to see the run AMZN has been on the last decade.

As our society changes I wonder how this giant could be stopped. It appears to me that more than ever the younger generations like to purchase things online and there is nowhere better to shop than Amazon. Their customer service is outstanding as I have had a few issues in the past and those were fixed in a few minutes with no wait times. Now Amazon appears to have a strong position in the Cloud technology and with the purchase of Whole foods they are jumping into another interesting category. To me this stock has the long term potential to be the largest percentage in VTSAX. I would assumed in another 10 years Amazon will be on levels we have never seen before.

I wont buy it but I think this stocks price will be a solid indicator of the U.S. economy. Any thoughts on Amazon as a company and its potential for the future?
My old financial advisor put me in AMZN
It just went to long-term and as painful as it was to sell, I dumped it despite the 80%+ gains it had. Now I really don't want to look!

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Pajamas
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Re: Amazon Stock - Can this giant be stopped?

Post by Pajamas » Sat Feb 03, 2018 1:56 pm

Dottie57 wrote:
Sat Feb 03, 2018 1:48 pm
Revenue and growth with limited profits - what good is it to an invester?
It allows a company to grow more rapidly and avoid taxes on all those profits it would otherwise report.

The share price is the reward for investors: $18 in 1997 to $1400 or so now.

Bacchus01
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Re: Amazon Stock - Can this giant be stopped?

Post by Bacchus01 » Sat Feb 03, 2018 2:01 pm

Does anyone here actually know how Amazon makes money?

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Re: Amazon Stock - Can this giant be stopped?

Post by saltycaper » Sat Feb 03, 2018 2:20 pm

Bacchus01 wrote:
Sat Feb 03, 2018 2:01 pm
Does anyone here actually know how Amazon makes money?
They use their own Amazon Mechanical Turk. They put out a job: "Make $2 billion dollars. Timeframe: 90 days. Fee: $1.49." Profit=($2 billion - $1.49). The only question: Will others catch on?
Quod vitae sectabor iter?

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Smorgasbord
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Re: Amazon Stock - Can this giant be stopped?

Post by Smorgasbord » Sat Feb 03, 2018 2:40 pm

Back when Wal-Mart was expanding across the US, the same thing was said. How can they be stopped? These days, I hardly shop at Wal-Mart as their prices are not competitive on many things (even ignoring the general low quality of their products).

My prediction is that Amazon starts a Sears like decline in the next 3 or so years. My basis for this is their apparent practice of purposefully holding non-prime orders for multiple days so that these orders take the max number of listed days. Going out of your way to annoy customers is never a good business practice (unless you are a near-monopoly like the airlines or cable companies), and Amazon isn't a monopoly yet.

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Pajamas
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Re: Amazon Stock - Can this giant be stopped?

Post by Pajamas » Sat Feb 03, 2018 2:46 pm

Smorgasbord wrote:
Sat Feb 03, 2018 2:40 pm
My basis for this is their apparent practice of purposefully holding non-prime orders for multiple days so that these orders take the max number of listed days. Going out of your way to annoy customers is never a good business practice
That's cynical and misinformed.

They don't hold packages just to annoy customers; they are offering a lower level of service for a lower price. If you want free shipping with no charges or membership fee, they give it to you in exchange for ordering a minimum amount and being willing to wait for the most efficient (cheapest) shipping method, which usually involves two carriers including the postal service for last-mile delivery as well as possible delays for shipping full rather than partially-full trucks to hubs or waiting for merchandise to transfer between fulfillment centers before shipping to you rather than shipping directly to you from its initial location.

Logistics is the core of Amazon's retail business.

People are spoiled. My guess from your post is that you are old enough to remember when if you wanted to order something, you filled out the order form in the center of the catalogue and then mailed it in and waited two weeks to get your stuff. Plus you had to pay extra for shipping. Now everybody wants it delivered within an hour for free.

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Re: Amazon Stock - Can this giant be stopped?

Post by Dottie57 » Sat Feb 03, 2018 2:50 pm

Pajamas wrote:
Sat Feb 03, 2018 1:56 pm
Dottie57 wrote:
Sat Feb 03, 2018 1:48 pm
Revenue and growth with limited profits - what good is it to an invester?
It allows a company to grow more rapidly and avoid taxes on all those profits it would otherwise report.

The share price is the reward for investors: $18 in 1997 to $1400 or so now.
Companies can sell goods at cost. As an investor, I want proof the company can make a profit year after year - consistently. If the current mpany chooses to plow earnings to generate growth - good. If slim earnings and profit, how is growth financed.

Bacchus01
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Re: Amazon Stock - Can this giant be stopped?

Post by Bacchus01 » Sat Feb 03, 2018 2:56 pm

Pajamas wrote:
Sat Feb 03, 2018 2:46 pm
Smorgasbord wrote:
Sat Feb 03, 2018 2:40 pm
My basis for this is their apparent practice of purposefully holding non-prime orders for multiple days so that these orders take the max number of listed days. Going out of your way to annoy customers is never a good business practice
That's cynical and misinformed.

They don't hold packages just to annoy customers; they are offering a lower level of service for a lower price. If you want free shipping with no charges or membership fee, they give it to you in exchange for ordering a minimum amount and being willing to wait for the most efficient (cheapest) shipping method, which usually involves two carriers including the postal service for last-mile delivery as well as possible delays for shipping full rather than partially-full trucks to hubs or waiting for merchandise to transfer between fulfillment centers before shipping to you rather than shipping directly to you from its initial location.

Logistics is the core of Amazon's retail business.

People are spoiled. My guess from your post is that you are old enough to remember when if you wanted to order something, you filled out the order form in the center of the catalogue and then mailed it in and waited two weeks to get your stuff. Plus you had to pay extra for shipping. Now everybody wants it delivered within an hour for free.
It’s neiyhe cynical nor misinformed. It’s well understood that amazon is pushing prime and making the non-prime experience not as good. They estimate that 65% of households now have access to prime. I think that number is high.

But Walmart has stepped up. Often comparable or better prices, faster shipping and easier returns.

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Smorgasbord
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Re: Amazon Stock - Can this giant be stopped?

Post by Smorgasbord » Sat Feb 03, 2018 3:02 pm

Pajamas wrote:
Sat Feb 03, 2018 2:46 pm
They don't hold packages just to annoy customers; they are offering a lower level of service for a lower price. If you want free shipping with no charges or membership fee, they give it to you in exchange for ordering a minimum amount and being willing to wait for the most efficient (cheapest) shipping method, which usually involves two carriers including the postal service for last-mile delivery as well as possible delays for shipping full rather than partially-full trucks to hubs or waiting for merchandise to transfer between fulfillment centers before shipping to you rather than shipping directly to you from its initial location.
Actually, I have no problem with FedEx smart post, or what ever other service is used that involves using multiple carriers to get me the package at the lowest possible cost. If it takes the carrier 7 days to move the package 60 miles, that's fine by me. The problem I have is when Amazon waits five days to hand off the package to the carrier because they know it will only take 2 days to travel those 60 miles.

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Re: Amazon Stock - Can this giant be stopped?

Post by Pajamas » Sat Feb 03, 2018 3:03 pm

Dottie57 wrote:
Sat Feb 03, 2018 2:50 pm
Companies can sell goods at cost. As an investor, I want proof the company can make a profit year after year - consistently. If the current mpany chooses to plow earnings to generate growth - good. If slim earnings and profit, how is growth financed.
Most any company could choose to put money into expanding the business rather than reporting profits. Business that have matured and find it difficult to grow accumulate cash and pay dividends.

Sounds like Amazon is not a company that you should invest in directly. You probably already hold a good bit of it in your mutual funds, anyway.
Bacchus01 wrote:
Sat Feb 03, 2018 2:56 pm

But Walmart has stepped up. Often comparable or better prices, faster shipping and easier returns.
Sounds like you would be more satisfied shopping at Walmart rather than Amazon.
Last edited by Pajamas on Sat Feb 03, 2018 3:12 pm, edited 1 time in total.

Dottie57
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Re: Amazon Stock - Can this giant be stopped?

Post by Dottie57 » Sat Feb 03, 2018 3:11 pm

Pajamas wrote:
Sat Feb 03, 2018 3:03 pm
Dottie57 wrote:
Sat Feb 03, 2018 2:50 pm
Companies can sell goods at cost. As an investor, I want proof the company can make a profit year after year - consistently. If the current mpany chooses to plow earnings to generate growth - good. If slim earnings and profit, how is growth financed.
Most any company could choose to put money into expanding the business rather than reporting profits. Business that have matured and find it difficult to grow accumulate cash and pay dividends.

Sounds like Amazon is not a company that you should invest in directly. You probably already hold a good bit of it in your mutual funds, anyway.
You are right, I will never hold individual shares of Amazon stock. I just hold index.

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Pajamas
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Re: Amazon Stock - Can this giant be stopped?

Post by Pajamas » Sat Feb 03, 2018 3:14 pm

Dottie57 wrote:
Sat Feb 03, 2018 3:11 pm
You are right, I will never hols individual shares of Amazon stock. I just hold index.
That is wise. You never know when Amazon will crash and burn. It was very volatile on Thursday and Friday both and on high volume due to the earnings announcement pre-market open on Friday.

Theoretical
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Re: Amazon Stock - Can this giant be stopped?

Post by Theoretical » Sat Feb 03, 2018 3:20 pm

Government is its big risk, likely as a reaction to Amazon making an overstep. At least as much is it's general corporate hubris backfiring in some major way.

Grocery is a big deal if Amazon gains a large percentage of the retail grocery biz, especially if it buys a lower grocery chain than Whole Foods to add even more options.

Another area is insourcing more and more of their shipping to their own delivery service. Their amazon lockers are great but that could be another issue.

Like other large industries, Amazon as it has gained market share has increased its prices so that it's often no longer the cheapest option.

IMO, my biggest risk projection for it would be to come under common carrier or worse, public utility status.

SlowMovingInvestor
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Re: Amazon Stock - Can this giant be stopped?

Post by SlowMovingInvestor » Sat Feb 03, 2018 3:36 pm

Bacchus01 wrote:
Sat Feb 03, 2018 2:01 pm
Does anyone here actually know how Amazon makes money?
AWS is pretty profitable.

I am less sure about most of AMZN's other operations.

Government is absolutely a big risk of Amazon -- that was what caused problems for MSFT as well (although ultimately, it was competition, not government that knocked it from it's perch).

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Re: Amazon Stock - Can this giant be stopped?

Post by TheAccountant » Sat Feb 03, 2018 3:43 pm

Amazon is more of a convenience thing than anything else. Why drive to the store when you can make a few clicks and have the item delivered? I know plenty of people who subscribe to prime, which has two-day shipping and other benefits.

For me, Amazon is more expensive than other places like eBay and even WalMart and other retailers. I think a lot of people are programmed into thinking that Amazon always has the best deals, which used to be true but nowadays usually isn't the case.

white_water
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Re: Amazon Stock - Can this giant be stopped?

Post by white_water » Sat Feb 03, 2018 3:55 pm

Off the top of my head: Kodak, Motorola, Sears, Sun Micro, Yahoo, Blockbuster all were high flyers once. Reversion to the mean, failure to change happens.

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Re: Amazon Stock - Can this giant be stopped?

Post by willthrill81 » Sat Feb 03, 2018 4:05 pm

Horsefly wrote:
Sat Feb 03, 2018 12:14 pm
aristotelian wrote:
Sat Feb 03, 2018 12:05 pm
Amazon has pretty much colonized the entire retail sector. At some point there must be a limit. Plus it is still barely profitable after all these years.
$1.9B in profit for one quarter doesn't sound to me like "barely", but I get your point.
A net profit of margin of 3.1% is very low, and I think that that's about as high of one as they've ever had. One of the the biggest criticisms of Amazon is that they haven't consistently made significant profit. True, they have been plowing as much back into the business as they can, but it still leaves many wondering if the profits will ever materialize.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Theoretical
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Re: Amazon Stock - Can this giant be stopped?

Post by Theoretical » Sat Feb 03, 2018 4:17 pm

willthrill81 wrote:
Sat Feb 03, 2018 4:05 pm
Horsefly wrote:
Sat Feb 03, 2018 12:14 pm
aristotelian wrote:
Sat Feb 03, 2018 12:05 pm
Amazon has pretty much colonized the entire retail sector. At some point there must be a limit. Plus it is still barely profitable after all these years.
$1.9B in profit for one quarter doesn't sound to me like "barely", but I get your point.
A net profit of margin of 3.1% is very low, and I think that that's about as high of one as they've ever had. One of the the biggest criticisms of Amazon is that they haven't consistently made significant profit. True, they have been plowing as much back into the business as they can, but it still leaves many wondering if the profits will ever materialize.
It's also what makes it vulnerable to charges of monopolistic behavior

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Re: Amazon Stock - Can this giant be stopped?

Post by willthrill81 » Sat Feb 03, 2018 4:18 pm

Theoretical wrote:
Sat Feb 03, 2018 4:17 pm
willthrill81 wrote:
Sat Feb 03, 2018 4:05 pm
Horsefly wrote:
Sat Feb 03, 2018 12:14 pm
aristotelian wrote:
Sat Feb 03, 2018 12:05 pm
Amazon has pretty much colonized the entire retail sector. At some point there must be a limit. Plus it is still barely profitable after all these years.
$1.9B in profit for one quarter doesn't sound to me like "barely", but I get your point.
A net profit of margin of 3.1% is very low, and I think that that's about as high of one as they've ever had. One of the the biggest criticisms of Amazon is that they haven't consistently made significant profit. True, they have been plowing as much back into the business as they can, but it still leaves many wondering if the profits will ever materialize.
It's also what makes it vulnerable to charges of monopolistic behavior
In what way? That they're trying to monopolize the markets in which they compete by achieving little profit, then to raise their prices and boost their profit once their competitors are gone? That sounds a bit too shaky for regulators to do much with.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Amazon Stock - Can this giant be stopped?

Post by inbox788 » Sat Feb 03, 2018 4:52 pm

willthrill81 wrote:
Sat Feb 03, 2018 4:18 pm
In what way? That they're trying to monopolize the markets in which they compete by achieving little profit, then to raise their prices and boost their profit once their competitors are gone? That sounds a bit too shaky for regulators to do much with.
The irony is that the very regulations needed to "enforce companies make profits" are likely to further reduce their margins as they struggle to adapt. Trying to identify what Amazon (or Google or Facebook, etc.) are doing that makes them a monopoly and further abuses their monopoly power to the point of being illegal is very challenging. It all begins with narrowing down the market they compete in, and no one will agree, and it won't be settled in the early rounds with the regulators. It likely takes several appeals before there is some agreement (or compulsion) and by then, a lot of technology is outdated.

You can thank "anti-trust" measures which helped elbow Apple out of the eBook business. You think Walmart is going to have any chance? If only I could short Kobo or this was only a larger part of their business, Rakuten ( https://www.bloomberg.com/quote/4755:JP ). Look for cheap readers/tablets this Christmas and a fire sale the next.

Apple to pay $450m settlement over US ebook price fixing
https://www.theguardian.com/technology/ ... reme-court

Walmart teams up with Kobo to sell ebooks and audiobooks
https://www.engadget.com/2018/01/26/wal ... udiobooks/

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Re: Amazon Stock - Can this giant be stopped?

Post by nisiprius » Sat Feb 03, 2018 5:08 pm

Picking 12/31/2000 by eyeball and intuition as the start of a period of time during which Amazon grew fairly steadily...

Source
Image

Since then, over a period of 17 years, Amazon has grown about 75X while the stock market as a whole has grown only 3X. That means that Amazon represents 25 times as much of the market as it used to. It currently represents about 1.7% of the stock market, or 1/59th of the market. If it continues to grow at the same rate, it will multiply its percentage of the market by another 59X in...

25X in 17 years = 25^(1/17)-1 = 20.8% per year...
...to grow 59X at 20.8% per year will take log(59)/log(1.208)...
= 21.5 years.

So, if it and the stock market continue to grow at the same rate as they grew over the last 17 years, the stock market will consist entirely, 100% of Amazon stock, and nothing else, by midyear 2038.

Remember, that isn't just 100% of retail, that's 100% of everything. No ExxonMobil, no Walt Disney, no Microsoft... just Amazon.

I've been wrong about lots of things, but I'm pretty sure that won't hapen The giant will be stopped, or slowed to the normal growth rate of a mature business, long before the end of 2038.

I remember when it was projected that Wang Laboratories would surpass IBM in just a few years... I think the projection was made by Dr. Wang himself in the mid 1990s, and Wang was projected to be bigger than IBM by the year 2000. Some readers probably don't know what Wang Laboratories was; I'll leave doing the web search as an exercise for the reader.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Amazon Stock - Can this giant be stopped?

Post by Bacchus01 » Sat Feb 03, 2018 6:58 pm

Pajamas wrote:
Sat Feb 03, 2018 3:03 pm
Dottie57 wrote:
Sat Feb 03, 2018 2:50 pm
Companies can sell goods at cost. As an investor, I want proof the company can make a profit year after year - consistently. If the current mpany chooses to plow earnings to generate growth - good. If slim earnings and profit, how is growth financed.
Most any company could choose to put money into expanding the business rather than reporting profits. Business that have matured and find it difficult to grow accumulate cash and pay dividends.

Sounds like Amazon is not a company that you should invest in directly. You probably already hold a good bit of it in your mutual funds, anyway.
Bacchus01 wrote:
Sat Feb 03, 2018 2:56 pm

But Walmart has stepped up. Often comparable or better prices, faster shipping and easier returns.
Sounds like you would be more satisfied shopping at Walmart rather than Amazon.
Wasn’t the premise that Amazon can’t be stopped? It wasn’t about my preference. Amazon is being beaten at part of their game.

Bacchus01
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Re: Amazon Stock - Can this giant be stopped?

Post by Bacchus01 » Sat Feb 03, 2018 7:00 pm

SlowMovingInvestor wrote:
Sat Feb 03, 2018 3:36 pm
Bacchus01 wrote:
Sat Feb 03, 2018 2:01 pm
Does anyone here actually know how Amazon makes money?
AWS is pretty profitable.

I am less sure about most of AMZN's other operations.

Government is absolutely a big risk of Amazon -- that was what caused problems for MSFT as well (although ultimately, it was competition, not government that knocked it from it's perch).
AWS is the largest part of their profit and until recently the only part. Their net ecommerce business is barely profitable and only recently became so. They went a long, long time without making a profit in the things most people know amazon for.

Jeff Albertson
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Re: Amazon Stock - Can this giant be stopped?

Post by Jeff Albertson » Sat Feb 03, 2018 7:29 pm

On the BBC World News channel this weekend: ' Break up the Tech Giants'
Google, Apple, Facebook, Amazon and Microsoft. In the space of just ten years, these five have become the biggest companies on the planet, each utterly dominating the market they operate in. They've got so large by offering consumers what they want but should we be worried about so much wealth and influence over our lives being centralised by a handful of tech giants on the west coast of America? Nik Gowing chairs a lively debate.
http://www.intelligencesquared.com/even ... ch-giants/
or
http://www.bbc.co.uk/programmes/n3ct3h25

iamlucky13
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Re: Amazon Stock - Can this giant be stopped?

Post by iamlucky13 » Sat Feb 03, 2018 7:55 pm

bg5 wrote:
Sat Feb 03, 2018 11:29 am
As our society changes I wonder how this giant could be stopped. It appears to me that more than ever the younger generations like to purchase things online and there is nowhere better to shop than Amazon. Their customer service is outstanding as I have had a few issues in the past and those were fixed in a few minutes with no wait times. Now Amazon appears to have a strong position in the Cloud technology and with the purchase of Whole foods they are jumping into another interesting category. To me this stock has the long term potential to be the largest percentage in VTSAX. I would assumed in another 10 years Amazon will be on levels we have never seen before.

I wont buy it but I think this stocks price will be a solid indicator of the U.S. economy. Any thoughts on Amazon as a company and its potential for the future?
Do they need to be stopped?

Their customer service is good, but their website is a mess, they have a growing, seldom discussed problem with their 3rd party sellers that have been driving a lot of their growth, they often are at a price disadvantage, their primary customer retention feature - the 2-day prime shipping - drops the ball frequently, their business model inherently requires a significant amount of individual product handling, brick and mortar retailers that they have been winning market share from are stabilizing again, and big money is flowing into competing online retail platforms.

AWS is highly profitable because the web services industry in general is highly profitable. As that market matures, pricing may become a lot more critical.

I figure they'll probably keep growing for a while, but I don't invest in it because I haven't figured out a way to determine with any confidence that they will grow enough to justify their current valuation.

iamlucky13
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Re: Amazon Stock - Can this giant be stopped?

Post by iamlucky13 » Sat Feb 03, 2018 8:00 pm

Jeff Albertson wrote:
Sat Feb 03, 2018 7:29 pm
On the BBC World News channel this weekend: ' Break up the Tech Giants'
Google, Apple, Facebook, Amazon and Microsoft. In the space of just ten years, these five have become the biggest companies on the planet, each utterly dominating the market they operate in. They've got so large by offering consumers what they want but should we be worried about so much wealth and influence over our lives being centralised by a handful of tech giants on the west coast of America? Nik Gowing chairs a lively debate.
http://www.intelligencesquared.com/even ... ch-giants/
or
http://www.bbc.co.uk/programmes/n3ct3h25
Just some mild amusement on my part on their wording:

"Each utterly dominating the market they operating in."

Is that like half man, half bear, half pig? Their markets mutually overlap - Goggle, Facebook, and Amazon are major web service providers; Google, Apple, and Microsoft are major OS providers; Apple, Amazon, and Microsoft are major hardware manufacturers; etc.

So how do they each utterly dominate the same markets?

inbox788
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Re: Amazon Stock - Can this giant be stopped?

Post by inbox788 » Sat Feb 03, 2018 8:08 pm

Jeff Albertson wrote:
Sat Feb 03, 2018 7:29 pm
On the BBC World News channel this weekend: ' Break up the Tech Giants'
Google, Apple, Facebook, Amazon and Microsoft. In the space of just ten years, these five have become the biggest companies on the planet, each utterly dominating the market they operate in. They've got so large by offering consumers what they want but should we be worried about so much wealth and influence over our lives being centralised by a handful of tech giants on the west coast of America? Nik Gowing chairs a lively debate.
http://www.intelligencesquared.com/even ... ch-giants/
or
http://www.bbc.co.uk/programmes/n3ct3h25
The British are coming! The British are coming!

One if by land, two if by sea.

I think they have their hands full with figuring out Brexit. Don't know when they'll find time for the War of 2018. Will they also take on PetroChina, Royal Dutch Shell, Volkswagon, Toyota and BP?

http://www.telegraph.co.uk/business/201 ... d-in-2016/

Who regulates? How big? Why just big? Just knock down the 5 biggest companies by whatever chosen criteria? One time? Every year? It would suck if 6th place gained just happens to gain enough that day to replace 5th place.

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telemark
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Re: Amazon Stock - Can this giant be stopped?

Post by telemark » Sat Feb 03, 2018 8:40 pm

iamlucky13 wrote:
Sat Feb 03, 2018 7:55 pm
Their customer service is good, but their website is a mess,
Um, have you been to one of their competitors' web sites lately? Say Walmart, or Target, or Sears? At least Amazon's pages don't crash or take minutes to load, I can expect to find what I'm looking for, and their suggestions usually aren't too far off the mark. Also, Amazon has convinced a lot of people that, by paying for shipping a year in advance, they are somehow getting it for free. That's brilliant marketing, because who doesn't like free stuff, even when you have to pay for it?

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Re: Amazon Stock - Can this giant be stopped?

Post by madbrain » Sat Feb 03, 2018 8:50 pm

Dottie57 wrote:
Sat Feb 03, 2018 1:48 pm
Revenue and growth with limited profits - what good is it to an invester?
It won't always be that way. Once they eliminate their competition, they can raise prices and profits will shoot up. That's likely when government intervention will occur. I have already seen a lot of items with rising prices on Amazon, to the point that B&M stores often beat them.

Amazon wins for the large catalog that can never be available at retail. But when it comes to things like retail groceries, I am not sure that sector is ever going to be truly disrupted. We buy most groceries from Costco, then some from Safeway, some from Trader Joe's, some from Wal-Mart, in that order (and none from Whole foods, now Amazon). There is no single retail grocery store, much less grocery delivery service that can replace even a single one of our trips. Even those stores that do have online delivery like Safeway still don't have the majority of the articles that we buy available for ordering. So, I think Amazon will continue to coexist with B&M grocery stores for a long time to come.

BTW, had a terrible experience at an Amazon locker recently for a return - first time I tried one. Had to drive 12 miles round trip to the nearest one, and pay $8 for parking. Amazon doesn't validate parking, but the nearby Safeway did. I bought $20 of hard apple cider there and they validated, which saved me $7 on the parking. Last time I use Amazon locker for sure.

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Re: Amazon Stock - Can this giant be stopped?

Post by madbrain » Sat Feb 03, 2018 8:51 pm

telemark wrote:
Sat Feb 03, 2018 8:40 pm
iamlucky13 wrote:
Sat Feb 03, 2018 7:55 pm
Their customer service is good, but their website is a mess,
Um, have you been to one of their competitors' web sites lately? Say Walmart, or Target, or Sears? At least Amazon's pages don't crash or take minutes to load, I can expect to find what I'm looking for, and their suggestions usually aren't too far off the mark. Also, Amazon has convinced a lot of people that, by paying for shipping a year in advance, they are somehow getting it for free. That's brilliant marketing, because who doesn't like free stuff, even when you have to pay for it?
You can add up to 4 people to your Prime membership for delivery. A friend added me. I have been getting the "prime shipping" literally for free for years. I can still see that many items are more than at retail stores due to the built-in cost of shipping.

I agree Amazon has a great web site. The others are far behind.

SlowMovingInvestor
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Re: Amazon Stock - Can this giant be stopped?

Post by SlowMovingInvestor » Sat Feb 03, 2018 8:59 pm

I just use Amazon's free 5-7 day shipping. In most cases, goods arrive well within 5 days. It's not hard for me to make it up to $25, since I have a staple snack that I add to bring price up to $25.

A few days back, I wanted to cash in a large number of coins and discovered that most Coinstar machines would allow me to generate an Amazon GC without their 8% commission.

So all, in all, I doubt that Amazon is making much money out of me. But I suppose most consumers aren't like me.

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telemark
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Re: Amazon Stock - Can this giant be stopped?

Post by telemark » Sat Feb 03, 2018 9:10 pm

madbrain wrote:
Sat Feb 03, 2018 8:51 pm
telemark wrote:
Sat Feb 03, 2018 8:40 pm
iamlucky13 wrote:
Sat Feb 03, 2018 7:55 pm
Their customer service is good, but their website is a mess,
Um, have you been to one of their competitors' web sites lately? Say Walmart, or Target, or Sears? At least Amazon's pages don't crash or take minutes to load, I can expect to find what I'm looking for, and their suggestions usually aren't too far off the mark. Also, Amazon has convinced a lot of people that, by paying for shipping a year in advance, they are somehow getting it for free. That's brilliant marketing, because who doesn't like free stuff, even when you have to pay for it?
You can add up to 4 people to your Prime membership for delivery. A friend added me. I have been getting the "prime shipping" literally for free for years. I can still see that many items are more than at retail stores due to the built-in cost of shipping.

I agree Amazon has a great web site. The others are far behind.
If your friend is paying for it it isn't free, literally or otherwise. But as I said, brilliant marketing.

Dottie57
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Re: Amazon Stock - Can this giant be stopped?

Post by Dottie57 » Sat Feb 03, 2018 9:28 pm

madbrain wrote:
Sat Feb 03, 2018 8:50 pm
Dottie57 wrote:
Sat Feb 03, 2018 1:48 pm
Revenue and growth with limited profits - what good is it to an invester?
It won't always be that way. Once they eliminate their competition, they can raise prices and profits will shoot up. That's likely when government intervention will occur.
I've been hearing about raising prices and big profits for more than a decade..../yawn

madbrain
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Re: Amazon Stock - Can this giant be stopped?

Post by madbrain » Sat Feb 03, 2018 9:40 pm

telemark wrote:
Sat Feb 03, 2018 9:10 pm
If your friend is paying for it it isn't free, literally or otherwise. But as I said, brilliant marketing.
It's still free to me :) Anyway, I thought I would mention this since even if you split the cost with friends, it will not be much.

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