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My thoughts -- for a small immature company, yes, there can be lots of value embedded in a company that may not be reflected in GAAP earnings. Therefore, with a smaller company that doesn't make money -- you could make the argument that there's a problem of monetization, that there's perhaps a significant amount of immediately unproductive investment which has yet to make its way to the top line, and ultimately, the bottom line.

But Amazon? A very mature business with a huge market cap to boot. Not some start-up by any stretch of the imagination. Way too much hype for what effectively is just a retailer. They've tried a number of businesses and they really can't make any of them profitable. They're utterly dependant on continuing to squeeze third parties for lower costs and there's a limit to that. They don't bring much, if any proprietary advantage to anything that they do. To top it all off, they're not a leader in anything, and their website is ugly and barely functional the one time I tried to buy something from them. I'm hard pressed to be even a customer of the company, nevermind consider investing in any of its securities.

Plus their employees are widely considered to be relatively over-worked and under-paid. So if ever there were to be mountains of cash generated by the business, guess who gets first dibs on it in the whole scheme of things?
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Jul 10, 2013
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I don't understand how come this stock is not 20 bucks. A company based on a promise in the past 10 years. Their business model is to beat revenues regardless of a loss. If I pulled that with CRA they would declare my business as hobby.

This company is all hype, but people buy it.
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provocateur wrote:
Oct 28th, 2013 8:40 pm
I don't understand how come this stock is not 20 bucks.
How would we even value it at $20? They have no earnings. They are a very mature business. They are probably closer to their revenue peak than the 'market' believes.

There's tons of companies that can take $1 of capital and turn it into at least a few cents of annual recurring earnings when all items (depreciation, etc.) have been netted out. Amazon can't even accomplish that.
A company based on a promise in the past 10 years. Their business model is to beat revenues regardless of a loss.

This company is all hype, but people buy it.
Yup. They've bamboozled non-technical-minded minded people into thinking that they have magic proprietary technology. But when you get right down to it, there's nothing unique about any Amazon product. They've invented nothing. They can't even seem to use their large scale and clout to extract higher than average margins. Amazon is more properly referred to as a cult, not a business.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Well, they have assets. Hence twenty bucks.
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provocateur wrote:
Oct 28th, 2013 10:15 pm
Well, they have assets. Hence twenty bucks.
Assets that can't be converted to cash and earnings over the long run aren't worth anything though.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Dec 11, 2005
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These threads are getting so common and boring. "Why is this company stock worth so much, it is not making money", blah blah.

The idea that Amazon is worth $20 a share is RIDICULOUS. It's just totally ridiculous. If you tried arguing that at any firm in existence you would be thrown out on the street. It might be a little hot right now but claiming it is worth $20 is just stupid.

Can we just make a new thread called "Regrets" and move all the posts there? Because that is all these threads really are, is whiny regret posts, you did not buy in years ago, and now you regret it, and you need to mask your regret with false justifications of why you did not buy in when you could.

It's just a re-hash of the same thread two years ago about Netflix. We can all see how WRONG you guys were then.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
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brunes wrote:
Oct 29th, 2013 7:29 am
The idea that Amazon is worth $20 a share is RIDICULOUS. It's just totally ridiculous. If you tried arguing that at any firm in existence you would be thrown out on the street. It might be a little hot right now but claiming it is worth $20 is just stupid.
Then how does a company that doesn't have earnings and has little prospect of ever having earnings, get valued? Propose a model! Because, so far, all I see is $0.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Mar 10, 2010
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Mark77 wrote:
Oct 29th, 2013 2:12 pm
Then how does a company that doesn't have earnings and has little prospect of ever having earnings, get valued? Propose a model! Because, so far, all I see is $0.
As they say, Price is Truth...so Amazon is worth exactly what's it worth today. If you think it isn't, short it or ignore it.
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Vitalogy80 wrote:
Oct 29th, 2013 2:18 pm
As they say, Price is Truth...so Amazon is worth exactly what's it worth today. If you think it isn't, short it or ignore it.
No, price isn't truth. We know that markets routinely misprice assets. Remember the tulip bubble?
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Jul 23, 2007
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The way you guys are talking, you'd think Amazon never made money.
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Mark77 wrote:
Oct 29th, 2013 2:19 pm
No, price isn't truth. We know that markets routinely misprice assets. Remember the tulip bubble?
No, I wasn't around in the 1800's...if Amazon is selling for $330, then that's exactly what it's worth today. If you think Amazon is worth $20, but no one will sell it to you for $20, then it isn't worth $20. It's just like any other product/company. If you say a Playstation 4 is worth $600, the market will quickly tell you what it's worth when you go to sell it. Or since you think housing is so overpriced, why not try offering people 20% of what they're asking for their house and see how many offers get accepted. If people are willing to pay $380,000 for the average house in Canada, that's what it's worth.


Why do you care so much about Amazon if you aren't Long or Short it?? If you feel it's irrationally overbought, then short it and make millions when it crashes.
Penalty Box
Apr 16, 2012
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Yes that is my question exactly to Mark77.

There are people who paid millions for an ugly stamp. Is that overpriced? If so, why don't I hear you complaining about it?


There are people who are willing to pay $800 for PS4 on launch day. Is that overpriced? Are you going to talk about how overpriced that purchase was and that the market is irrational?
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Stryker wrote:
Oct 29th, 2013 3:19 pm
The way you guys are talking, you'd think Amazon never made money.
Sure, that's a pretty accurate 'thought'. Go look at their financials. Earnings have always been "around the corner". Except that they've never really managed to turn the corner. Its excuse after excuse after excuse. And for some reason, the 'market' buys it.

This is no longer a small-cap company with a lot of growth ahead of it. They've marketed themselves to death, have the economies of scale, all the latest/greatest technology, etc., and still can't make money. Nearly 20 years in business, you'd think they would have at least made some money by now!
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...

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