Conglomerates Didn’t Die, They Look Like Amazon

Post by icebraining » Tue, Jun 20, 2017, 12:31 PM UTC

appleiigs wrote: post #9

I don't know what the fetish is with Amazon. The article is ridiculous in suggesting Amazon putting Walmart out of business when it only started making real money in 2016. Amazon made $2B in 2016 and $0.6B in 2015, lost $0.2B in 2014. Walmart made $13B last year... but the article says Amazon is the one with the better mouse trap and "impervious to the natural life cycle of a conglomerate"? huh? With the toxic cultur…

Post by sharemywin » Tue, Jun 20, 2017, 12:33 PM UTC

obastani wrote: post #45

TheSpiceIsLife wrote: post #33

Earlier quoted context omitted.

Okay, well then, thanks for pointing that out. I retract my previous statement and substitute it with something more like: The discount investors apply to conglomerates is linked to perceived lower risk. So while it might not be accurate to say investors want smaller, nimbler, more focused companies without specifying which investors, it can be accurate to say something like investors looking for a higher rate of ret…

I don't understand your comment. Given the same rate of return, investors prefer lower risk. So what you seem to be saying is conglomerates produce lower returns. But I don't think that's what the conglomerate discount is, which I believe says that the components of a conglomerate are worth more than the conglomerate itself. More precisely, "Conglomerate discount is calculated by adding an estimation of the intrinsic…

Post by icebraining » Tue, Jun 20, 2017, 1:04 PM UTC

appleiigs wrote: post #54

icebraining wrote: post #51

Earlier quoted context omitted.

Amazon has made real money for years, they just have reinvested it. Comparing Amazon to Uber is silly, they're an established business and leader in multiple markets.

Reinvesting income doesn't give you negative income. Having the highest marketshare doesn't mean they make money from it. Bezo is considered the worlds worst boss and there have been many articles about its corporate culture... that will catch up to Amazon.

Post by mcguire » Tue, Jun 20, 2017, 1:20 PM UTC

sharemywin wrote: post #48

michaelt wrote: post #38

Earlier quoted context omitted.

Is there supposed to be something inherently not-fine with a conglomerate? Some people think they have a tendency to be inefficient, as high-performing areas of the business waste money subsidising low-performing areas of the business. And low-performing areas are insulated from free market feedback, like going bankrupt or investors leaving. Of course, some of this stuff is only obvious with hindsight. It was probabl…

Would the economy be better off if the money from google ads was paid back as dividends?

Post by cylinder » Tue, Jun 20, 2017, 1:29 PM UTC

indigochill wrote: post #10

noobermin wrote: post #6

While prices are low, another aim of governments should be to keep wages high enough to maintain a standard of living. I think the fear around Amazon isn't that it is going to all of a sudden raise the price of goods from Whole Foods, but that they will reverse the employee friendly aspects of the company. When prices are low but wages aren't high enough to guarantee that people can take advantage of those lower pric…

There is another side of that which I've noticed as an American expat. If one country or industry decides to keep wages high, there are at least two effects. 1. The minimum required experience is also increased. You see this in industries where it's very difficult for new blood to break into because the minimum required experience/skill level is above an "entry level" position because the pay expectations of the indu…