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Amazon Reports First Quarterly Loss in 4 Years

nytimes.com

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Re: Amazon Reports First Quarterly Loss in 4 Years

#11

Post by gojomo »

thetabyte wrote: post #6
simonsarris wrote: post #3

Shares already recovering, loss was "better" than expectations, a lot of their spending is on important business stuff (warehouses, kindle, web properties) that will yield returns later. In other words, revenue is nearly identical and there's no profit, presumably because of these new things. Amazon is one of the few very large companies that has extremely high potential for growth. I made an OK amount of money buyin…

Dumb question, as I literally know nothing about stock or savings: isn't it generally a bad idea to put 100% of your long term money in any one place?

That's a smart question. I hope simonsarris means 100% of his incremental dollars (new savings), and that he already has other other 'long-term dollars' in a broader range of investments.

Re: Amazon Reports First Quarterly Loss in 4 Years

#12

Post by rorrr »

thetabyte wrote: post #6
simonsarris wrote: post #3

Shares already recovering, loss was "better" than expectations, a lot of their spending is on important business stuff (warehouses, kindle, web properties) that will yield returns later. In other words, revenue is nearly identical and there's no profit, presumably because of these new things. Amazon is one of the few very large companies that has extremely high potential for growth. I made an OK amount of money buyin…

Dumb question, as I literally know nothing about stock or savings: isn't it generally a bad idea to put 100% of your long term money in any one place?

Yes, it's a horrible idea. That's basically playing a lottery, since unexpected things happen all the time, successful companies go out of business (Yahoo, and AOL looked pretty damn good 10 years ago).

Re: Amazon Reports First Quarterly Loss in 4 Years

#13

Post by jaggederest »

simonh wrote: post #9
malandrew wrote: post #5

Earlier quoted context omitted.

I'm guessing everyone is waiting until Amazon is the only game in town and can increase margins every product but those that would allow a new competitor to survive to profitability. Once they are in a position to increase margins without risk of lost market share, the current valuation will be justified.

Fresh competition is never more than a click away. I get that Amazon is playing the long game, forgoe profits now to build a dominant company for the future. But how long have they been playing this long game for? How much longer before it pays off? This is a 17 year old company. People younger than Amazon are getting married and having kids.

I recall something about Bezos planning for the decade or longer, so any time they think the net present value of running a no-profit quarter is higher than the returns of profit-taking.

Could be another 20-30 years.

Re: Amazon Reports First Quarterly Loss in 4 Years

#14

Post by lotsofpulp »

ahi wrote: post #7
simonsarris wrote: post #3

Shares already recovering, loss was "better" than expectations, a lot of their spending is on important business stuff (warehouses, kindle, web properties) that will yield returns later. In other words, revenue is nearly identical and there's no profit, presumably because of these new things. Amazon is one of the few very large companies that has extremely high potential for growth. I made an OK amount of money buyin…

>a lot of their spending is on important business stuff (warehouses, kindle, web properties) that will yield returns later This has been the Amazon story basically since founding. At some point, a company needs to yield real returns on their investments.

Wal Mart's profit margins are only a few percentage points, maybe 5% if they're lucky. That's the nature of retail. There definitely seems to be some utility and efficiency gains being made by Amazon. I doubt investors are seeking the kind of explosive growth or profits seen in tech companies like Apple, but rather a steady gain in market share from companies like Wal Mart, Best Buy, and whatever else you can deliver to a home.

Re: Amazon Reports First Quarterly Loss in 4 Years

#15

Post by gabemart »

rorrr wrote: post #12
thetabyte wrote: post #6

Earlier quoted context omitted.

Dumb question, as I literally know nothing about stock or savings: isn't it generally a bad idea to put 100% of your long term money in any one place?

Yes, it's a horrible idea. That's basically playing a lottery, since unexpected things happen all the time, successful companies go out of business (Yahoo, and AOL looked pretty damn good 10 years ago).

It's a good idea if and only if you believe your personal access to information and ability to perform analysis is greater than the aggregate capability of the market as a whole.

Re: Amazon Reports First Quarterly Loss in 4 Years

#16

Post by rm999 »

ahi wrote: post #7
simonsarris wrote: post #3

Shares already recovering, loss was "better" than expectations, a lot of their spending is on important business stuff (warehouses, kindle, web properties) that will yield returns later. In other words, revenue is nearly identical and there's no profit, presumably because of these new things. Amazon is one of the few very large companies that has extremely high potential for growth. I made an OK amount of money buyin…

>a lot of their spending is on important business stuff (warehouses, kindle, web properties) that will yield returns later This has been the Amazon story basically since founding. At some point, a company needs to yield real returns on their investments.

Not quite, their operating income steadily grew until 2010, when it was about 5x higher than in 2003. That said, it makes sense. Amazon has very lofty but realistic goals, which are an intriguing combination. These goals would be impossible without all that investment.

Re: Amazon Reports First Quarterly Loss in 4 Years

#17

Post by iyulaev »

Say what you want about some of their other business practices, but they appear to have successfully destroyed rents in the retail industry, which is great for consumers of retail. Regardless of how they do for their shareholders, that is a real benefit to society.

Right?

Re: Amazon Reports First Quarterly Loss in 4 Years

#18

Post by Retric »

simonsarris wrote: post #10
thetabyte wrote: post #6

Earlier quoted context omitted.

Dumb question, as I literally know nothing about stock or savings: isn't it generally a bad idea to put 100% of your long term money in any one place?

Sorry, I'm only referring to new money: every 2 weeks I put $1000 into my brokerage account to buy whatever long term stocks/funds on my watchlist look good that week. Lately that's been nothing but Target, but it might switch to nothing but Amazon next month, or 50% AMZN 50% something else, and so on. So it's just the new money coming into the account getting divvied up, but doesn't reflect the actual holdings of lo…

You might want to consider buying 2000$ every 4 weeks depending on your transaction fees.

Re: Amazon Reports First Quarterly Loss in 4 Years

#19

Post by confluence »

thetabyte wrote: post #6
simonsarris wrote: post #3

Shares already recovering, loss was "better" than expectations, a lot of their spending is on important business stuff (warehouses, kindle, web properties) that will yield returns later. In other words, revenue is nearly identical and there's no profit, presumably because of these new things. Amazon is one of the few very large companies that has extremely high potential for growth. I made an OK amount of money buyin…

Dumb question, as I literally know nothing about stock or savings: isn't it generally a bad idea to put 100% of your long term money in any one place?

Isn't it stupid to just to have one job, one car, be a citizen of one country, have one house and one family. I mean really - one must diversify. What would you do if you lost any one of those?

No, it's not stupid to concentrate wealth. Problems only arise when you do it stupidly, like buying too big a house, being part of the wrong family, living in the wrong country or buying an unsafe car.

Diversification does not reduce risk but it cuts your returns in half. All correlations go to one in a crisis and you can't hedge the end of the world.

Note: To all downvoters - putting all your eggs in multiple baskets does not protect you from an asteroid impact any more than a person with all eggs in one basket.

People who think diversification makes them safe are frankly wrong.

Re: Amazon Reports First Quarterly Loss in 4 Years

#20

Post by confluence »

rorrr wrote: post #12
thetabyte wrote: post #6

Earlier quoted context omitted.

Dumb question, as I literally know nothing about stock or savings: isn't it generally a bad idea to put 100% of your long term money in any one place?

Yes, it's a horrible idea. That's basically playing a lottery, since unexpected things happen all the time, successful companies go out of business (Yahoo, and AOL looked pretty damn good 10 years ago).

Yahoo! and AOL did not look good 10 years ago. They were selling at insane P/E ratios and had absolutely no way of making good on those numbers. If you invested in them - you'd be a moron.

Unexpected things really don't happen very often and black swan risk is way overblown. When things blow up - they're a long time coming - you just didn't see the data.

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