I just read an article which seems to suggest that Amazon is the perfect tech investment. The company, according to the writer of the article, is expanding into other areas which will make more money for it eventually . . . . . . Amazon makes cheap electronics, provides innovative web services and they are breaking into emerging markets. The latter will take a while before it begins to pay off but this shouldn't be an issue for long term investors. Your thoughts? Is Amazon Stock "unstoppable?"
I like to see earnings and dividends. A bit of earnings has surfaced in recent quarters, but no dividends are in sight. $AMZN is a speculative play with a super-silly price level and a dumb-founding mind-bending PE ratio around 880. The Dow indicies have PE ratios in the mid-teens; the S&P 500 PE ratio is in the low twenties (http://www.wsj.com/mdc/public/page/2_3021-peyield.html). If one plays with tech, consider that $AAPL's PE ratio is ~13. The highest PE ratio in my holdings is 20. Maybe I'm old school in a number of ways, but $AMZN is clearly not for me.
Well they are certainly doing what they need to stay competitive in a high tech world. No business will last forever, but some last a good long time. I don't think they even have any close competitors at this point, but Jet.com, Walmart.com and Ebay give them some competition. Amazon is just kind of like the go to service though, and it seems like everyone can find something they want or need on Amazon.
It's really going to depend on how many markets they can successful attack. Amazon tries to out-compete others by using their enormous funding to sell products at a loss to slowly destroy any company that competes (since no other company can just lose money as long as possible).
I don't think that unstoppable is the right word, but for now and for the forseeable future they do seem to be the force to be reckoned with. While the price may start to slow, I doubt there will be any massive fluctuations as the brand keep on to be a reliable investment.
As long as people keep buying online and Amazon continue to offer the services they do then I don't think we're likely to see the back of them. I might have described them as being "unstoppable" around 10-15 years ago but these days, things do appear to have levelled out.
A big part of Amazons success does make them unstoppable, and that is it´s infrastructure. Any company that wants to compete directly with Amazon will have to spend an enormous amount of money on real estate and warehouses upfront. The logistical side of amazon gives it a HUGE pricing advantage over everyone else who starts trying to compete with them. It is very similar to Coca Cola worldwide. Coke has such a huge distribution network already built up that it can sell Coke all over the world well cheaper than any other worldwide provider could. If AliBaba tries to move to the USA and be a direct, real competitor of Amazon, they will be forced to take a huge loss for many years on every product they sell, or they will have to charge much higher than Amazon for the exact same product just because the distribution Amazon build up during the internet bubble is so much cheaper and efficient than any new company could build.
