AMZN - Amazon.com Inc.

[Cardboard]

This dog has been hurting me since last July. So yes, had I not entered this position, I would have made 100% + last year. Now, so I am clear, I hate publishing these numbers. And I can guarantee you that it is not happening every year, although my long term record is very good. I felt that I had to disclose it for a reply to Moore, maybe a mistake.

 

Regarding hedging, I am not hedged directly on AMZN. However, I am fully invested and considering BAC and AIG warrants, I would be levered if not for some shorts (actually, I am still net 100% + long on a notional basis). There is always the possibility that this thing takes off to infinity but, you would need an even more exuberant market with more liquidity. That seems somewhat improbable. I also keep my shorts always smaller than my long positions since when the position moves against you, unlike a long one, it gets larger.

 

On capitalism, I don't think at all that Amazon represents it, not anymore. With capitalism, there is an incentive to make a profit when you enter into any enterprise. Return on equity is what determines what is the best option for you on where to deploy your capital. Please stick with me.

 

Let's take an example, what would you say if Coca-Cola decided tomorrow to take its net profits down to breakeven by reducing its selling prices for 16+ years in order to gain market share and eventually kill Pepsi? If Pepsi refused to follow suit, it's quite possible that Coca-Cola would show large sales growth. However seeing this, it's quite probable that Pepsi would also cut its prices in the same manner and eventually no one would want to invest in either company: there would be no dividend, no return on capital or equity. The stock prices would likely plummet to next to nothing or trade very low until both companies would regain their senses. Now, I know that this is not the best example since some would never switch to the other brand at any price but, replace it with two crazy hotel owners in a small town, being the only two available, if you prefer. 

 

That is basically what Amazon has been able to do over all these years in the name of sales growth and clearly, they would be totally incapable based on current numbers to raise their prices to a level that would produce enough profits to justify the current valuation. They are growing sales above 20% a year, for now anyway. Assuming a P/E of 25, they would need $4.5 billion in net profits. To get this kind of profitability, they would have to increase now their selling prices on all items by 11%. What do you think would be the impact on sales growth in such competitive markets? Could sales actually decrease from current level under such scenario? What would then happen to the P/E? If the P/E comes down to 15, then net profits would have to be $8 billion and selling prices would have to increase by 18.7%.

 

Of course, some will mention the very large investments being made now! Where and how do you cut operating expenses by $7 billion without hurting current sales? Please show me. $4.5 billion in net profits is also a 7.3% net margin. Do you have a slight idea on know how hard this would be to achieve? For comparison, Wal-Mart has a net margin of 3.5%, Target of 4.2% and Costco of 1.7%.

 

The only reason why Amazon has been able to do it is because they have always been considered a start-up. A start-up can have no profit for a period of time or until sales have reached a critical level to reach profitability and reward the earlier investors who had foreseen the pot of gold down the road. The issue is that Amazon is no longer a small start-up. Sales have reached $62 billion a year and sales growth is now decelerating to the low 20% range despite massive investments. It is showing all the signs of a company that has attained some form of maturity. And that is why it is no longer representing capitalism and that eventually the music will stop unless profits are appearing in a major way and soon.

 

I sense a growing chorus of people questioning them now: more negative articles, some analysts. Some are also getting fed up of them continually missing all expectations and providing very poor disclosure. What do you think would happen if a guy like Einhorn finally decided to go short on them and present a strong thesis in public? What if Goldman issues a sell recommendation? The thing looks like a bubble ready to pop on any negative sentiment coming from a strong source. There is absolutely nothing holding up the stock price to such elevated levels other than faith and greed. They are considered like a can't do no wrong company or like Apple was at $600 or $700, but they have nowhere near the level of net cash to support the stock and have no profit.   

 

I still view the company as having an intrinsic value. It is not a zero unless the current massive increase in the number or warehouses or the new distribution model is a disaster (and could be) since it has been able to attract users or customers, its technology is top notch and they have net assets (although only $8.2 billion), but it remains just one alternative for people to shop. Normally, in capitalism everyone is more or less happy. The consumer likes the value proposition, competitors keep trying to be the one satisfying the consumer and competitors all make decent returns. At its size, Amazon is well past the point of proving to the earlier investors that it can produce decent net margins. And Mr. Bezos unless you don't know, free cash flow equals net earnings when you don't manipulate numbers and when a company has attained some form of maturity.

 

Cardboard

[Eric50]

Cardboard, I enjoy your posts, but I think you are making several mistakes:

 

- On shorting. The key for successful shorting is timing. If you short based just on valuation I doubt you can be very successful. Remember Keynes: “the market can stay irrational longer than one stays solvent.” I’m not sure when it is going to be a good time to short amazon; I don’t see a catalyst yet. It might have been the spike after Q4 earnings announcement a couple of weeks ago.

 

- Also on shorting I’d like to point out the risk of shorting when the central bank is printing heavily. This is barely discussed on this board but the Fed is printing $85bn a month. It provides a flow of liquidity that has to go somewhere. Very tough environment to short, you are swimming against the tide… On the other hand, when the market reverts, it’s going to be paradise for the short sellers… But again it emphasizes the importance of timing when one shorts stocks.

 

- On using your personal experience as a customer. That’s marketing 101: it’s not because you personally like or don’t like a product/service that it will be successful or not. Look around you, there are more and more people buying more and more stuff on the internet. It’s clearly a trend and there were numerous articles on that trend in the financial media around thanksgiving. I live in a wealthy suburb of Seattle and I see lots and lots and more and more of prime customers buying stuff from amazon several times of week, including amazonfresh. (Prime was actually a key trigger in the massive customer behavior change a few years ago: customers used to buy pretty much only media products, the introduction of prime led to much more diverse purchases).

 

- On capex spending. I think amazon is currently building a huge infrastructure that will give it a key competitive advantage in the future. They are about to get the spine to handle much higher volumes. This will lead to higher margin. Probably in the short term as the bulk of the investments has been made.

 

Growth might have slowed in Q4 but the more I think about it, the more I’m optimistic about amazon in the long term. Growth might reaccelerate in the future as it did in 2008. I think 10-15 years from now it will be bigger than Wallmart and the largest company on earth.

 

I’m not sure this has been discussed on this thread or this board, but there has been a good bullish case discussed here:

 

http://www.scribd.com/doc/98208572/ValueXVail-2012-Josh-Tarasoff

 

Bottom up line: I suspect you’ll be successful with your short position when the overall market realizes the insane game played by the central banks and the stock market corrects (even though amazon margins are likely to improve in the short term). Hopefully it will become super cheap and provide an entry point!

 

[bargainman]

Cardboard, you make good points, but I think you are too early.  There are negative articles on amazon for sure.  But I think it's still early in the game.  Bezos is famous for being very very long term oriented, heck, he's building a 10,000 year clock in the mountains.  He thinks that's his main advantage.  It's still early in the transformation from people shopping in person vs online.  The entire video and media industry is still transforming to digital.  Amazon is also just getting into the start of the cloud SAAS, IAAS and PAAS industries, and they are becoming the gorilla in the room.  They are becoming the highest scale infrastructure for a lot of startups, a lot of large companies etc in the cloud, no one is even close as far as I can tell.  Heck, NFLX is basically in bed with them even though they are their biggest competitor.  I don't know if anyone will be able to catch them, as this is very sticky.  They are basically gearing up to take on MSFT, IBM, GOOG, AAPL, ORCL, but their advantage is they come from a low margin world and don't feel the need to up their margins. It's still very very early in that arena, and they are building an unsurmountable lead in terms of the infrastructure and scale they are able to build.  Their revenues are about the same as TGT and COST, but about 20% those of walmart.  Plus they are not only expanding in retail but transforming the media industry, and transforming the tech industry.  They still have a long long way to go there.

 

Now that's just looking at the business, not the numbers or the valuation.  I just think they have a long enough runway.  I do think eventually the stock will dive and they will have to focus on turning a profit, but I wouldn't bet on it happening within the next year or 2, especially with the reality of their SAAS AWS business.  At the very least I would take on FOTM calls to protect it so that it's at max a 100% loss for you.  If that's possible, I haven't looked at all the strikes available. 

 

Just IMHO.  If your last year's return is any indication, you're a much much better investor than I am, but I do have a pretty deep background in tech and have read a lot about Bezos, so hopefully some of this perspective helps.  I have seen another very smart tech savy investor do a very convincing short thesis on amazon, and he also got killed...  It just seems like a short needs a very good amount of timing ability, and presents a theoretical increasing maximum risk.  Doing that on a great company seems like a dangerous proposition...

[rmitz]

On capitalism, I don't think at all that Amazon represents it, not anymore. With capitalism, there is an incentive to make a profit when you enter into any enterprise. Return on equity is what determines what is the best option for you on where to deploy your capital. Please stick with me.

 

My point about capitalism is that it is the nature of all businesses that do not have differentiating factors to have their margins approach zero over time.  So AMZN driving down margins is actually very capitalistic.  Now, money flocking to AMZN for investment is *not*, I grant you; I agree that they should not be valued so highly.

 

Let's take an example, what would you say if Coca-Cola decided tomorrow to take its net profits down to breakeven by reducing its selling prices for 16+ years in order to gain market share and eventually kill Pepsi? If Pepsi refused to follow suit, it's quite possible that Coca-Cola would show large sales growth. However seeing this, it's quite probable that Pepsi would also cut its prices in the same manner and eventually no one would want to invest in either company: there would be no dividend, no return on capital or equity. The stock prices would likely plummet to next to nothing or trade very low until both companies would regain their senses. Now, I know that this is not the best example since some would never switch to the other brand at any price but, replace it with two crazy hotel owners in a small town, being the only two available, if you prefer.

 

Seems like we actually agree.  The action is capitalistic in general, though the investment reactions are irrational.  I think there is some differentiating value in AMZN, via network effects and overall quality.  I don't think it's nearly as big as the pricing would indicate though.

[rkbabang]

On capitalism, I don't think at all that Amazon represents it, not anymore. With capitalism, there is an incentive to make a profit when you enter into any enterprise. Return on equity is what determines what is the best option for you on where to deploy your capital. Please stick with me.

 

My point about capitalism is that it is the nature of all businesses that do not have differentiating factors to have their margins approach zero over time.  So AMZN driving down margins is actually very capitalistic.  Now, money flocking to AMZN for investment is *not*, I grant you; I agree that they should not be valued so highly.

 

Let's take an example, what would you say if Coca-Cola decided tomorrow to take its net profits down to breakeven by reducing its selling prices for 16+ years in order to gain market share and eventually kill Pepsi? If Pepsi refused to follow suit, it's quite possible that Coca-Cola would show large sales growth. However seeing this, it's quite probable that Pepsi would also cut its prices in the same manner and eventually no one would want to invest in either company: there would be no dividend, no return on capital or equity. The stock prices would likely plummet to next to nothing or trade very low until both companies would regain their senses. Now, I know that this is not the best example since some would never switch to the other brand at any price but, replace it with two crazy hotel owners in a small town, being the only two available, if you prefer.

 

Seems like we actually agree.  The action is capitalistic in general, though the investment reactions are irrational.  I think there is some differentiating value in AMZN, via network effects and overall quality.  I don't think it's nearly as big as the pricing would indicate though.

 

That is how I see it as well.  As a customer I hope they do keep expanding into other areas and keep their margins low.  Looking at it as an investor the stock looks to have a touch too much tulip-bubble quality about it.  Keep buying it because it always goes up.  It doesn't matter what you pay you can always sell it for more.  This isn't to say I'd short it though.  Sorry Cardboard, I think you're both right & crazy (maybe gutsy is a better word).  Remember that when you are time constrained, sometimes being correct isn't enough.

 

[Cardboard]

"...but their advantage is they come from a low margin world and don't feel the need to up their margins. It's still very very early in that arena, and they are building an unsurmountable lead in terms of the infrastructure and scale they are able to build."

 

The main reason why they have been able to sustain their build out despite no margin is because the stock market has believed in them and it has also allowed them to access the debt market. It is all about confidence. On the latest debt issuance, S&P was positive on them and Moody's was negative because of missing free cash flow to support the debt. And if you think that the equity market does not matter to them, $8.35 billion has come from equity issuance since its founding vs a book value of $8.2 billion. Only $1.9 billion came from retained earnings and there is $1.8 billion that was used to buy-back stock explaining the gap. The rest is other comprehensive loss. The issuance of restricted stock also helps them over time since they say that this cost is unimportant, so it is overlooked. It also makes employees pretty happy when it vests and the stock has appreciated quite a bit from the day they received it. If it goes down, they may not like the deal so much and demand cash payments.

 

So if debt and stock markets turn more cautious, internally generated cash will become crucial to continue this build out. People looking at cash flow and the cash pile may say wow! 2012 was a very good year, but it wasn't. Cash flow minus capital expenditures and acquisitions was negative $350 million. This despite a lot of, and I mean a lot of extending current cash payments into the future and trying to reduce inventories and accelerating cash collection. This kind of thing works well when you grow fast, but when sales growth slows watch-out! Regarding the cash pile, it has grown by $1.9 billion. Looks good until you realize that they have taken on $2.8 billion more in debt. So the cash has to come from somewhere to continue the expansion. They have net cash on the balance sheet that they can use up, but Wall Street may get nervous if it continues to decrease. Down close to $1 billion last year.

 

Another fallacy is their unsurmountable lead in terms of the infrastructure and scale that they are building. For perspective, the net sum invested in the entire business when you exclude cash is a whopping $21.1 billion. Un-depreciated, that is $23.6 billion. Apple has $137 billion in cash and Google $45 billion with both having next to no debt. Do you think that these two players don't have the human capital and financial wherewithal to re-create an Amazon? This is not Coca-Cola or Marlboro that we are talking about here. There is no craving or impulse buying. It is just a retailer doing business via direct mailing competing purely on cost, efficiency and name recognition. There is AWS, but how quickly and easily do you think that other tech players could create that?

 

Now of course, no one has re-created this infrastructure because they all see that it is making little money, if any at all, and that the new model is likely to make things worse. So they are letting Mr. Bezos build his empire which yes, is a problem long term in terms of market share, name recognition, unless other retailers such as Wal-Mart, Costco, Best Buy and all others figure a way to be more efficient and to slow them down via the growth of their own net infrastructure and reducing their selling price at the stores. Interestingly, it seems to have happened this Holiday season.

 

The other problem for Amazon is that they are effectively shut out from the largest and fastest growing market in the world: China. They have tried, but it seems that they have a pretty fierce opponent already with a monster market share relative to what they have themselves in the U.S.

 

http://seattletimes.com/html/businesstechnology/2020320189_kindlelesschinaxml.html 

 

The treatment of employees is also another major issue. I have never seen a successful tech company treating its employees like shit. A desk made out of plywood? Pretty low salaries other than for a few cashing restricted stocks? Maybe that it is a good place to get a head start in life or to grab some experience, then to move on to some greener pastures. It just does not seem like a long term winning formula. Even in the ultra competitive world of retail, employers understand the need to treat employees properly: to avoid errors, to be more friendly to customers. Costco pays their employees really well and Wal-Mart despite the low pay tries its best to have good morale at the store to entice customers to come back.

 

Finally, regarding the "short" catalyst, none was present at Apple at $700. Maybe that IPad sales were disappointing? Here I have two and maybe more. They missed forecasts in a major way for 2 quarters in a row. Will it take a third one?

 

Anyhow, I guess that I have stated my case and that we may have to agree to disagree.

 

Cardboard

[Grenville]

I have to say that the most perturbing thing about AMZN is the repeated stories I read about how crappy it is to work in their distribution centers:

 

http://www.ft.com/intl/cms/s/2/ed6a985c-70bd-11e2-85d0-00144feab49a.html#slide0

 

Interesting article. Thank you for posting it.

[PlanMaestro]

Estimate of the Kindle's current profits.

 

http://farm9.staticflickr.com/8101/8471067473_af4b137d03.jpg

[Grenville]

Just started watching this interview with Warren Buffett. He has some interesting comments re:Amazon & Jeff Bezos at the 3min mark.

 

http://www.pymnts.com/briefing-room/commerce-3-0/the-innovation-project-2013/warren-buffett-video/

[Grenville]

From another thread.

 

thanks for the video. I believe Berkshire funded some of AMZN's bonds several years ago, too.

 

Didn't know that, so I did some digging and here are some articles in regards to the bond purchase and a letter Buffett wrote to Bezos praising him for expensing stock options. It looks like the bonds were bought at Geico.

 

"Buffett praises Amazon, then buys its debt"

http://articles.chicagotribune.com/2003-04-12/business/0304120174_1_junk-bonds-warren-buffett-berkshire-hathaway

 

"Warren Buffett Puts His Money Where His Mouth Is"

http://articles.sun-sentinel.com/2003-04-08/business/0304070608_1_berkshire-hathaway-warren-buffett-amazon-com

[txlaw]

Perhaps you AMZN shorts may get your catalyst sooner rather than later?

 

http://www.fastcompany.com/3007586/most-innovative-companies-2013/googles-same-day-delivery-service-goes-live-san-francisco

 

http://www.bloomberg.com/news/2013-04-01/amazon-reign-as-most-expensive-stock-seen-ending-on-profit-tech.html

[muscleman]

Cardboard, I  think this will become a lousy short, if you have actually opened a position.

Imagine you were the owner of a business, wouldn't you love to have the opportunity to kill other players? But this is generally very costly to do, and you can easily kill yourself.

However, the fact that the market gives AMZN a lousy valuation gives them the chance to keep selling at or below cost, in order to kill other players. After that, they could easily improve their profit margin.

On the other hand, if you were only allowed to make your bets on one position, what is the better expected return, long SHLD, or short AMZN?

[txlaw]

Bezos' letter to shareholders:

 

http://www.sec.gov/Archives/edgar/data/1018724/000119312513151836/d511111dex991.htm

[DCG]

Impressive. Thanks for posting.

[PlanMaestro]

http://www.scribd.com/doc/98208572/ValueXVail-2012-Josh-Tarasoff

[blainehodder]

http://www.scribd.com/doc/98208572/ValueXVail-2012-Josh-Tarasoff

 

The author points out "Investing for growth depresses margins", but then assigns fat margins as "normalized" with minimal discussion of what the resulting effect will be on growth.  Does the author think growth is a function of margins or not?  Doesn't it go both ways?

 

This is fantasy analysis:

 

Normalized EBIT margin 7%

Normalized EBIT 3,474

Less: Taxes @30% 1,042

NOPAT - LTM2,432

Assumed growth rate 40%

 

[Grenville]

Bezos' letter to shareholders:

 

http://www.sec.gov/Archives/edgar/data/1018724/000119312513151836/d511111dex991.htm

 

I liked the letter, but not as interesting as past letters.

 

On another note, I've been having issues with Amazon instant video for a couple of weeks where I haven't been able to get the 5.1 audio through my ps3. It was annoying enough that I tried Netflix. The Netflix interface and experience is much nicer. The 5.1 audio also works with Netflix. I've been contacting Amazon for the last couple of weeks regarding the issue without much luck. They have given me some monetary credits for the issue, but I just want the audio. The instant video was important in convincing me to sign up for prime.

[Hielko]

http://www.scribd.com/doc/98208572/ValueXVail-2012-Josh-Tarasoff

 

The author points out "Investing for growth depresses margins", but then assigns fat margins as "normalized" with minimal discussion of what the resulting effect will be on growth.  Does the author think growth is a function of margins or not?  Doesn't it go both ways?

 

This is fantasy analysis:

 

Normalized EBIT margin 7%

Normalized EBIT 3,474

Less: Taxes @30% 1,042

NOPAT - LTM2,432

Assumed growth rate 40%

No, it doesn't go both ways. According to the author the fat margins are already here, but just not visible in the financial statement because money is directly reinvested (at very attractive rates). So you do have both at the same time, it's only not directly visible.

[Grenville]

Amazon’s Invasion of the CIA Is a Seismic Shift in Cloud Computing

http://www.newspressnow.com/news/local_news/article_9238aec8-85e9-5edf-8142-4a8567fc5301.html

 

Amazon is building their cloud solution onsite at the CIA, which is very different than their current solutions. Pretty interesting. The GAO link in the article provides some additional details.

 

---

 

On another note, my prime video is working again with full audio and now they have subtitles. Still not as clean an interface as netflix but I'm happy with the 5.1 again.

[Shawn]

The valuations for Amazon are ridiculous. Indigo Books and Music is a superior investment and IMO the better company.

[ScottHall]

The valuations for Amazon are ridiculous. Indigo Books and Music is a superior investment and IMO the better company.

 

The better company? I am very skeptical of that, but I'll hear you out.

[AchilliesValue]

I used to wonder about the AMZN valuation but I came across these comments from a well known VIC member on CSinvesting that makes you think a bit. Keep in mind the comments are a few years old.

 

charlie479  12/20/11 11:25 PM AMZN one of the best companies I forgot to say that I chuckled thinking about the analyst making the “I want to buy Amazon at 100x earnings” pitch. I suppose that doesn’t necessarily make it mispriced but the earnings power is certainly higher than current GAAP net income. I think they could easily raise their prices by $0.63 per each $25 order (not exactly the same thing, but if Super Saver shipping was $0.63 instead of free, would that really change shopper behavior?). If they managed the business to maximize current profits like this, that $0.63 increase per $25 would double earnings. If sales grow like they did the past 12 months then suddenly the multiple isn’t looking so crazy. I’m not saying this makes AMZN one of the top half dozen stock investments in the world but the p/e might not be awful if your thesis is right.

 

I’ve occasionally wondered if someone could beat Amazon if they had $80 billion. I don’t think they could take over the #1 spot but I do think they could become competitive in a lot of areas. I would probably use the $80 billion to start several category-specific internet retailers, develop a large selection within that category, and drive turnover by capturing mind share as the expert in that category and as the lowest price seller, initially at losses. This is more or less the Amazon playbook, and companies like Diapers.com (before being bought), Newegg, and Blue Nile have managed to carve out niches. I bet there will be more. I think if VCs or public markets are willing to lose enough money for awhile, it isn’t that hard to replicate the warehouse network and other logistical moats.

 

Another reason to temper the who-needs-another-pipeline thought I posed in the previous comment is that consumers sometimes choose retailers for reasons other than price and selection. Certain bricks and mortar retailers will always have an advantage in terms of convenience (e.g. convenience stores, insightful eh?). And customers like to touch and try on certain products, like clothes, so I don’t see Amazon getting anything close to 50% share in those categories. Freshness matters, too, so it’s not clear grocery can be effectively penetrated by Amazon, and I bet that is a large portion of the Global Retail sales denominator. So, perhaps the current internet retail number at 3% is lower than what most people think, but maybe the maximum theoretical internet retail percentage is also lower than what most people think.

 

charlie479  12/20/11 10:47 PM AMZN one of the best companies

 

I think Amazon is one of the most admirable companies in the world. It has the expense advantages in rent and labor over B&M retailers that you mention, and it has cost advantages over other internet retailers as well. The massive sales volume makes the fixed cost percentages very low, and the inventory turnover in many products is so high that it can accept lower gross margins and still generate higher ROIC than competitors who charge a larger markup. The lower markup attracts more customers and generates more volume, which only reinforces the edge. It is the higher-turn/lower-markup Borsheim’s dynamic that Buffett describes.

 

The advantages aren’t limited to cost either. The high turnover also allows them to carry a huge number of SKUs at adequate ROIC, so they can offer customers the widest selection in many categories. For certain categories, after I browse Amazon and then Wal-Mart, I’ll come away feeling that Wal-Mart doesn’t have much of a selection. It’s hard to make Wal-Mart look narrow. Amazon is the first/last place many people shop because they know it has the widest selection and it’s likely to have that selection in stock.

 

Another non-price advantage is that they’re the most trusted internet retailer. I actually think those customer satisfaction ratings might be understating the difference. Their return policy and customer service is great. Even if a product is available from discountworldxyz.com at a slightly cheaper price, I’ll pay more to get it through Amazon because I know it’ll be the product I ordered, or else I’ll be able to return it. Who wants to deal with negotiating shipping costs or return policies with anyone else? I don’t think this is simply Amazon being more generous than discountworldxyz.com. They have the low-cost structure described in paragraph #1 that allows them to accept higher return costs while still generating better ROICs. I also suspect that their extensive review database reduces some of the likelihood of returns.

 

I think many retailers like Best Buy are at such a severe selection and cost disadvantage (even adjusting for sales tax) that their businesses are in trouble in the long-term. I even worry about beloved Costco. I no longer have no-price-comparison-needed-let’s-just-buy faith when walking down the aisles at Costco because Amazon has better prices frequently enough to make me doubt. More broadly, as someone who is cheering for the Costcos (no financial rooting interest, I just root for them because I admire them), I worry that Amazon will get to such scale one day that it’ll be a more efficient overall system for one UPS guy to drive from the Amazon warehouse and cruise through your neighborhood dropping off everything you and your neighbors need for the week. That might sound crazy but the current system of having you and all your neighbors separately drive SUVs 15-20 minutes to Costco to each walk through the aisles hand-picking and then checking out, doesn’t sound that efficient by comparison. I haven’t read anything about Bezos explicitly saying that’s his endgame but I wouldn’t be surprised if that’s in the 10 year wish list. If they end up with the cheapest and widest pipeline, there might not be much need for other pipelines.

[Grenville]

Amazon increasing prices. Will have to wait and see what happens to gross margins for proof.

 

 

As Competition Wanes, Amazon Cuts Back Discounts

http://www.cnbc.com/id/100866228

[compoundinglife]

 

"Amazon Beat Out IBM And Won A $600 Million Cloud Computing Contract With The CIA"

 

http://www.businessinsider.com/amazon-vs-ibm-in-a-battle-for-the-cloud-2013-7

[DTEJD1997]

TIME TO BUY!!!!!!!

 

They only lost $.02/share this last quarter!

 

When this company grows up & becomes a big player, they are going to earn money.

 

All the naysayers will be chagrined when this happens.  I'm going to sell all my beanie babies and parlay the profits into AMZN.

 

Hmmm...seriously.

 

The company is now steadily LOSING money.  I just don't get it....