Reply With QuoteI'd say KFC is looking tasty and KLM is set to fly (sorry).
i agree that current market optimism seems misplaced, but i can't see how amazon is not going to increase profits over the next 18 months or so. AWS must gain from rise in wfh, netflix usage etc. while on the delivery side they are recruiting aggressively.
is it insane to buy substantially into a single stock like that?
I'd say KFC is looking tasty and KLM is set to fly (sorry).
Well:
- what if consumer spend collapses (which would affect the delivery part of Amazon)?
- And if collapsed consumer spend meant that e.g. Netflix spend was not an essential, reducing the need for AWS spend?
Amazon's kind of a special case as far as how they are viewed by the investment community though, they seemed* to be able to get away (for some years) with not making any money and still see share prices rise, with the bet being that at a certain point in the future they will Rule The World.
*edited for clarity
Last edited by Bondurant; 14th April 2020 at 14:56.
Amazon not making a profit? I have heard so many people repeating this, doesn't make it any more true. $15 billion last year.
Someone who lies about the little things will lie about the big things too.
I didn't say right now, I was referring to the years when they didn't, while their share price still grew. As far as I am aware, this was due to the investment community's acceptance of their long-term plan vs. the more normal quarter by quarter judgements that are passed on most other companies.
Amazon will be a winner I'm sure. Stock is at all time highs helped by being the only reliable retailer that's massively grown all aspects of its business lines as mentioned above by robinsongreen68. Amazon are also making it easier for retailers to sell on their platform during this time so I can't see how they can lose out.
They don't make a net 'profit', but all their operational profit is invested right back into its infrastructure which makes them so hard to beat.. Alibaba is another worth looking at if you are playing the long game - basically the Amazon of China.
I think they do make net profit...
Anyway - I don't necessarily disagree with what you have posted...but what if consumer spend collapses? How would that not affect them?
I think people sometimes forget AWS, which is the supremely dominant provider of the most important technology service. They are so confident that they publish a price list, with standard volume discounts, and that’s what you pay (as long as you commit to minimum volume levels).Originally Posted by Raffe
Mind you, I expect some of their volumes will fall, both committed and variable, until the general economy recovers.
Sure, which would have been the same as with Google, Facebook, Netflix or other tech companies. It took them many years to grow to the size requires to make a profit, but then it was massive.
Someone who lies about the little things will lie about the big things too.
When tech stocks start out it is growth and market share at any cost ... it is a land grab ... when they mature is when the pay back ...
The tech giants are now all very profitable ... question is which will be the next generation of tech giants? Will the be tech (computer/comms) or bio?
True...Google would have made consistent profits a hell of a lot quicker than Amazon though.
We digress...
also my thinking with amazon is that even if consumer spend does fall (as seems likely) there's a huge need for business data backup through the crisis, and which then will have to be maintained- must be a very big driver for the cloud/AWS, no?
apparently goldman sachs is predicting a 30% rise over 12 months (never quite trust these brokerage things though, they could just be pushing their own stocks?)
ive always invested via funds so im a bit nervous of putting a big whack into a single stock though...
Your first point...how does that follow? I don't think I've understood correctly
I do think you are right about increased cloud usage in general. It makes much more sense than owning infra
US surging above 24000, on what exactly, where is the optimism coming from? 16m and counting and the world is shut, y dey do dis?
Sent from my SM-G988B using Tapatalk
Ok, I get it now, they aren't related.
Brrrrrrr! Brrrrrrr!
That'll be the sound of the money printing press.
Brrrrrrr!
Tesla at $740 - go figure. The world has gone mad.
I'm not sure they can print enough to plug this hole; they are going to have to allow some to fail ...
I can't see the fuel for this optimism; I waiting to see what *event* sparks the next sell off ...
The I.M.F. predicts the worst economic downturn since the Great Depression.
The International Monetary Fund issued a stark warning about economic damage from the coronavirus, saying on Tuesday that the global economy faces its worst downturn since the Great Depression as shuttered factories, quarantines and national lockdowns cause economic output around the world to collapse.
In its World Economic Outlook, the I.M.F. projected that global growth will contract by 3 percent in 2020, an extraordinary reversal from earlier this year, when the fund forecast that the world economy would outpace 2019 and grow by 3.3 percent. This year’s fall in output would be far more severe than the last recession, when the world economy contracted by less than 1 percent between 2008 and 2009. A 3 percent decline in global output would be the worst since the Great Depression, the I.M.F. said.
“As countries implement necessary quarantines and social distancing practices to contain the pandemic, the world has been put in a Great Lockdown,” said Gita Gopinath, chief economist of the I.M.F. “The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetimes.”
Ms. Gopinath said that the loss of global output will be “far worse” than the 2008 financial crisis and that policymakers are facing an unusual predicament in that traditional stimulus measures are little match for a pandemic that is being fought with shutdowns and quarantines.
“It is very likely that this year the global economy will experience its worst recession since the Great Depression,” she said.
NY Times
yes sorry i just meant i think there are two separate main drivers of the business and even if the delivery side drops, the cloud side should do well.
i have no real clue though, it just seems to make sense to me.
Are your shorts on the dow/ S&P still open or did you close them?
Although to be fair, Amazon have made a profit every year since 2005 (a couple of years excepted), if pre-tax Income is what you would consider a profit. Their PE ratio at 31/12/19 was about twice what it was at 31/12/05 so presumably investors believe there is much more growth to come.
I am absolutely no expert on this but suspect the formula is thus;
No bad news - stocks go up
Bad news - Fed gets involved, prints a load of money, forgiveable 'loans', interest rates plummet - stocks go up
It is all bullsh*t as unemployment claims are massive, companies are going to fail. I suspect though that only after the virus has passed and we get back out there that any of this new reality will become clear and then ccccrrrrrraaaaasssshhhhh!!!
Edited to say though that for the market to crash we need people to sell. So the question is, when stocks tanked a couple of weeks back, who is left as a seller who didn't dump their portfolio then? So if those people are already out of the market then to test new lows we need major panic at a much higher level of resonance than we did 2 weeks ago and I believe COVID if anything is less scary now that we know more about it?
Last edited by ryanb741; 14th April 2020 at 16:10.
Bull market signal if ever I saw one :)
Still short, actually looking to add a third contract somewhat higher. Three is my normal position size, only sold two on Friday before it turned lower.
* Given the irrational movements maybe I switch to an options strategy, will reflect later when my daughter is in bed.
Someone who lies about the little things will lie about the big things too.
Articles like that are common during the bottoms of markets. if you believe that the market discounts all known information as it is agreed upon, then either it will be worse then the article says or better which leaves a lot of scope wither way.
If we could accurately predict the market, then it would easy to become Billionaire off of leveraged bets. The market makes a fool out of most professional investors (I believe it was circa 95% don't outperform index weighted benchmarks in any given year, let alone year on year). Eventually, all bull and all bears are correct over a given set of time.
Whilst we may be learning how to manage the health crisis; we still don't have a *solution* and it seems some way off.
What we don't really know yet is what the economic crisis, if any, will be as companies are "on ice" for months on end and how their balance sheets will cope and what the level of consumption will be once we emerge from the health emergency ...
As an example who is planning any overseas holidays in the next 2 years; or to buy a new car?
the message for the last however many years has been 'don't fight the fed', i think traders are just sticking with what they know (perhaps many don't know any different?)
Hence, I am staying on the sidelines for now. I believe the real impact of COVID-19 has not been fully baked into the market yet.
Seems like Coronavirus could kill everyone tomorrow and stocks would still head to infinity because the Fed is printing infinity money.....
Well the trend always looks strongest just before it breaks.
Yeah I'm 100% sure. I'm jesting in my earlier posts. There is nothing about the current economic situation that justified having a US stock market at May 2019 levels. It is stupid. I suspect FOMO is much of the reason but then again I thought much of the trading was done by bots so it is very weird.
Amazon make a few quid for the shareholders but what they really want is data, Data harvest is worth more than dollars to companies like amazon..
Yep we work very closely with Amazon and Google and the rich data profiles they create of their users (and consequent 'intent' data generated indicating what they are most likely to engage with) is incredible and facilitates a very individualised experience for each user. The difference between good marketing and spam is relevance after all.
For whom other than their shareholders do they reap the value of the data? Everything which Amazon generates, whether cash earnings or data (which actually is a proxy for future cash earnings, otherwise it has no value) is for the benefit of their shareholders.
Well, you answered your own question really, having huge data equals to solid future profits and so it continues to create more data and so on..
Although, there is conspiracy theories of how the data is used..
Last edited by murkeywaters; 14th April 2020 at 19:13.
My question was rhetorical in reply to your post, which seemed to suggest they would chose to give a few quid of profit to their shareholders while their real aim was to collect data. My point is everything they do is about creating value for their shareholders (and they are pretty successful at it, as evidenced by the stock returns).
It is possible for a corporation to enrich the quality of their customers lives as well as making profits for the shareholders ... in fact if the former is the case the latter almost always follows ...
Well wasn't that the Amazon idea from the beginning? Not sure if it's only me but I experience that the happy customer isn't quite as important anymore. Everytime they made a mistake, I got a huge apology and some goodie, most of the times a little voucher for a few Euros or a month's worth of Prime membership. Lately no such thing, not even an apology anymore but rather emails with walls of words intended to tire me out when I have a complaint. Suppose they are slowly but surely becoming just another large company.
Their workers where always the last of their considerations, and I am asking myself if customers who don't feel that special anymore will continue to forgive them for their appalling treatment of their workforce. Going forward, I am certainly less inclined to do so.
Found this in my twitter feed today:
That sums it up pretty well for me.Found this in my twitter feed today:
On the Amazon point I don’t use it so can’t comment on their service but certainly seems from your descriptions they are getting arrogant.
In today's news:
Why Mark Mobius says the stock market hasn’t seen an ‘absolute bottom’ yet
Published: April 14, 2020 at 3:43 p.m. ET
By William Watts
https://www.marketwatch.com/story/st...=mw_latestnews
I have noticed their prime service was getting worse, this was pre CV times, items out for delivery not turning up, sloppy delivery etc, to top it off, here in the UK there was an investigative documentary showing the pressure conditions the employees were put under, hours expected to work and not allowing any employment unions to get through the door, lots of videos on the tube saying similar things..
Mark Blyth explains the idiocy of bailing out wealthy investors, among other things...brilliant analysis. Supports the discussion that markets are at very unrealsitic levels presently.
Part 2
What I’m not getting is why these huge corporates are not being told by central banks to go to the shareholders for cash rather than the Fed, when they are swimming in cash they don’t give it to the Fed they give it to shareholders so isn’t now when that relationship has to reverse?
FTSE100 >2% down this morning, honeymoon period over?
Yes, no and maybe. What is for certain is that both Bears and Bulls will be winners if we wait long enough.
The markets should be smoking into oblivion but I really feel they are disconnected from reality. Let's see as there is a week of earnings reports. Should make the markets tank but then 'brrrrrrrr, brrrrrrrr', there goes the Fed printer again.
Last edited by ryanb741; 15th April 2020 at 10:41.
I have long term (SIPP) and short term (ISA) investments. The SIPP I have left, it is a painful 20% down from Feb and I continue to contribute to it monthly, but I took the recent rally as an opportunity to accumulate a war chest (let's be honest, a war tupperware) by selling out half my ISA investments. Off their high but still profitable overall.
Feeling better about having a cushion to invest or sit on depending on what life throws at me in the next few months.
The Fed may be able to bail out big business but it won't help the millions of smaller business that underpin the economy.
At some point central banks will have to draw the line and then we will start to see some high profile companies going down.
I don't understand why the Fed doesn't demand shareholders put the funds in ...?
Are we now living in a world where corporations just exist to funnel cash from the government to shareholders?
Yes, whilst Trump is in charge anyway
Sent from my SM-G988B using Tapatalk
Posting Permissions
