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Amazon.com Announces Second Quarter Sales Up 20%

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Re: Amazon.com Announces Second Quarter Sales Up 20%

#141

Post by MR4D »

jjeaff wrote: post #94
MR4D wrote: post #82

Earlier quoted context omitted.

P/E is NEVER useless. For instance, if a company misses on earnings, then maybe it was an outlier - an odd quarter of sorts. But if you do it a few times over, then you are not the growth company you thought you were, and your 100:1 p/e will come crashing down to join everybody else (albeit maybe on the high side) somewhere in the upper 20’s or in the 30’s. But here’s the key - to do that, a stock would have to lose…

But you are assuming that the end goal of the company and purpose of buying the stock is to participate in "earnings" in the form of dividends. But that is no longer the MO of many public companies now. The goal appears to just eternally grow the stock price and allow share holders to cash out in the form of appreciated shares which get a preferable capital gains tax treatment. Occasional earnings are just there to p…

First, capital gains and dividends have basically the same tax treatment (not identical, but close enough for anyone holding for longer than a year).

Second, a company’s market capitalization can only grow in one of two ways: increase in the P/E ratio, or increase in earnings. Of the two, the latter is more sustainable, and less susceptible to market downturns.

Dividends are just the percentage of earnings a company pays out to its shareholders for various reasons (I’ll skip the myriad of reasons for brevity).

The best measure of sustainable value creation is ROIC (Return On Invested Capital). Most people don’t use it because it’s not a readily available statistic and it’s not easy to calculate. But for the long term, I don’t know of anything better. Still, p/e is important.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#142

Post by kerng »

rocgf wrote: post #128
axaxs wrote: post #97

Earlier quoted context omitted.

This is absolutely true, sure, but the UX is dreadful. If someone like, say, DigitalOcean who has nice design spent the money to actually compete, I'd move in a heartbeat. Google is a nonstarter, and Azure is a 'maybe'. Most people use a few key services. Everytime I log in, I'm slammed with 200 tiny hyperlinks.

Just curious, why is Google a nonstarter?

Most companies don't even consider Google, it's a distant third and provides very limited offerings. There is a lot of love for Google on HN, but reality does look different.

Ther is also a common believe that they will just drop support for something whenever they feel like it - which in regards to GCP could be unwarranted but well it is what it is. I would pick AWS first, Azure is becoming a close second and GCPa distant third. I think Digital Ocean looks awesome and might be worth a look before GCP.

Also, GCP is having stability issues recently.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#143

Post by jjeaff »

MR4D wrote: post #141
jjeaff wrote: post #94

Earlier quoted context omitted.

But you are assuming that the end goal of the company and purpose of buying the stock is to participate in "earnings" in the form of dividends. But that is no longer the MO of many public companies now. The goal appears to just eternally grow the stock price and allow share holders to cash out in the form of appreciated shares which get a preferable capital gains tax treatment. Occasional earnings are just there to p…

First, capital gains and dividends have basically the same tax treatment (not identical, but close enough for anyone holding for longer than a year). Second, a company’s market capitalization can only grow in one of two ways: increase in the P/E ratio, or increase in earnings. Of the two, the latter is more sustainable, and less susceptible to market downturns. Dividends are just the percentage of earnings a company…

>First, capital gains and dividends have basically the same tax treatment (not identical, but close enough for anyone holding for longer than a year).

No, that's not correct. If you are being paid a dividend, whether it be qualified or not, that money is double taxed. Once at the corporate earnings rate and then again to you personally at capital gains rate.

As a shareholder, whether that tax all comes out of your pocket or not, doesn't matter. Your increase in value is effectively taxed at 60-70%.

But that is not the case if the company you invest in, rather than retaining earnings to pay dividends, reinvests into growth or other capital expenditures or keeps large sums of untaxed money in overseas accounts. Thus continually pushing the stock upwards. And allowing investors to make their own choices about cashing out. Be it by selling shares of getting loans using the stock as collateral.

Why in the world do you think Apple has $250B in cash, a full quarter of their total market cap, mostly stashed away in tax free zones?

It is for the simple reason that people can invest and get that money reinvested for them all without ever having to sell or take a distribution and then get taxed before using it or reinvesting it yourself.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#144

Post by MR4D »

jjeaff wrote: post #143
MR4D wrote: post #141

Earlier quoted context omitted.

First, capital gains and dividends have basically the same tax treatment (not identical, but close enough for anyone holding for longer than a year). Second, a company’s market capitalization can only grow in one of two ways: increase in the P/E ratio, or increase in earnings. Of the two, the latter is more sustainable, and less susceptible to market downturns. Dividends are just the percentage of earnings a company…

>First, capital gains and dividends have basically the same tax treatment (not identical, but close enough for anyone holding for longer than a year). No, that's not correct. If you are being paid a dividend, whether it be qualified or not, that money is double taxed. Once at the corporate earnings rate and then again to you personally at capital gains rate. As a shareholder, whether that tax all comes out of your po…

Go back and read what I said. Better yet, read Schwab’s tax summary here: https://www.schwab.com/public/schwab/investing/retirement_an...

My statement is correct.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#145

Post by mgfist »

scarface74 wrote: post #80
mgfist wrote: post #75

Earlier quoted context omitted.

Yes I meant TAM as the other person commented. Further more, even if amazon retail still isn't profitable (I haven't checked the numbers) AWS still wouldn't have spawned without it. Think of it as a pivot, even though they still kept amazon retail. I'm not really sure what your YC comment has to do with things.

Its every startups story that they are going to lose a bunch of money and eventually somehow make enough money to justify their evaluations. Not only hasn’t it happen with any YC company, nor has it happen with most of the money losing tech darlings like Uber, Lyft, Dropbox, Mongo,ElasticCo, etc. I believe that Amazon retail is profitable or could be anytime they chose, but not enough to justify Amazons valuation in…

That's simply because being profitable means you don't have anything better to do with your money, which signals to investors that you don't see any more growth opportunity. Mongo/elastic could both become profitable pretty quickly if they needed to (by slowing down hiring and expansion) but they don't do that because they're trying to grow as fast as possible, and they have enough money in the bank to sustain loses. Uber/lyft I think are fucked, but that's a different story.

Think of it this way. What do rich people do with their excess money? They invest it. So if you're a company like Mongo/elastic, what do you do with your excess money? Well, invest it back into the business. Both of these companies have years of runway before they go broke or have to go profitable, so it doesn't make sense for them to try and be profitable when there is still so much of the market left in the open.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#146

Post by jjeaff »

MR4D wrote: post #144
jjeaff wrote: post #143

Earlier quoted context omitted.

>First, capital gains and dividends have basically the same tax treatment (not identical, but close enough for anyone holding for longer than a year). No, that's not correct. If you are being paid a dividend, whether it be qualified or not, that money is double taxed. Once at the corporate earnings rate and then again to you personally at capital gains rate. As a shareholder, whether that tax all comes out of your po…

Go back and read what I said. Better yet, read Schwab’s tax summary here: https://www.schwab.com/public/schwab/investing/retirement_an... My statement is correct.

I think you need to re-read what I wrote. You are correct that your personal rate is similar for dividends vs capital gains.

But you are iggiring the bigger picture that dividends money had to be taxed on the corporate side before it was given to you.

Capital gains that are propped up by huge cash stores in overseas tax free accounts are not.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#147

Post by speedplane »

rb666 wrote: post #129
speedplane wrote: post #118

Earlier quoted context omitted.

> We are looking to move some of our applications to the cloud and Kubernetes the coming time. Google Cloud has a ton of built-in support and UI for Kubernetes clusters. They make it really nice. It's roughly the same price, so I'm not sure I'd run Kubernetes on any other service.

Have you compared it with DO's Kubernetes UI and support? Is DO really worse in that area?

> Have you compared [Google Cloud] with DO's Kubernetes UI and support? Is DO really worse in that area?

Nope, wish I had time to devote to such a comparison. Would love to see an article.

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