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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

#81

Post by polyfractal »

codex wrote: post #39

I think Amazon's profit per employee is around $6K. Compare to Apple at $600K. Amazon is practically a non-profit. Not surprising, as they play in a shitty, ghetto space--retail.

Besides what other people have mentioned, there is also the fact that Amazon employs a lot of people, and many of them are performing relatively mundane service jobs. Picking and packing products from the Amazon warehouses requires a large workforce, despite all the advancements in automatic warehousing.

Profit per employee isn't really a useful number in this respect.

Re: Amazon Reports First Quarterly Loss in 4 Years

#82

Post by confluence »

polyfractal wrote: post #80
confluence wrote: post #78

Earlier quoted context omitted.

> basic personal finance I fully understand the arguments for diversification. Just like I fully understand CAPM, modern portfolio theory and the assumption that var=risk. But it's all bullshit. Why are you investing in companies that have that risk? If you understand which companies return higher returns - why aren't you all in on them? It's bloody hard to find good companies and when you do - why on earth would you…

> basic investing Either I'm misunderstanding your argument or you are missing a fundamental tenant of finance (and indeed, most things in life). Higher returns typically comes with higher risk. A brand new startup is high risk with high reward if it pays out. The same thing applies to financial investments in high risk companies. People take risks because they want to try and beat the historical growth in their port…

Risk and return are not correlated. There are risks and there are returns. See AAA bonds during GFC. Great businesses are great companies at reasonable prices not overvalued growth stocks.

Most of modern economic and finance theory is based on fundamentally broken models of risk and return.

Re: Amazon Reports First Quarterly Loss in 4 Years

#83

Post by pacala »

pyoung wrote: post #72
lesterbuck wrote: post #59

Earlier quoted context omitted.

Alas, technology is destroying higher skilled, white collar jobs at a furious pace. At least that is the main thesis of the recent book by MIT business school faculty: Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy http://www.amazon.com/Race-Against-Machine-Accelerating-Prod... They give three explanations…

Totally agree. Once again, I may read too much sci-fi, but I think the end game (as it should be) to technological progress is the elimination of labor, completely. This probably won't happen in my lifetime, but assuming civilization can survive long enough, I believe it is inevitable. I can't even imagine what a society would look like under these conditions..., a post-scarcity economy would be a good starting point…

elimination of labor != post scarcity

We are physical beings with physical needs. We can't live on thin air, we need a basic input of energy and matter to survive. But our society is organized around private property. When you are born, you own nothing. So far, we've been exchanging labor in exchange or property. Once labor becomes valueless, the vast majority of people end up with no means to acquire property, which is essential for physically sustaining life. Something will have to give up, and I'm not placing my bet for the owner class suddenly having a change of heart and sharing their property with the rest of us. Which leaves the majority of people in a scarcer and scarcer world.

Re: Amazon Reports First Quarterly Loss in 4 Years

#84

Post by polyfractal »

confluence wrote: post #82
polyfractal wrote: post #80

Earlier quoted context omitted.

> basic investing Either I'm misunderstanding your argument or you are missing a fundamental tenant of finance (and indeed, most things in life). Higher returns typically comes with higher risk. A brand new startup is high risk with high reward if it pays out. The same thing applies to financial investments in high risk companies. People take risks because they want to try and beat the historical growth in their port…

Risk and return are not correlated. There are risks and there are returns. See AAA bonds during GFC. Great businesses are great companies at reasonable prices not overvalued growth stocks. Most of modern economic and finance theory is based on fundamentally broken models of risk and return.

Define "great company".

Known risks and future returns are certainly correlated. Unknown risks (financial crisis meltdown) are obviously uncorrelated because they are unknown. You can't control for those, which is why you diversify.

What are you going to do when your "great company" has a horrible CEO scandal and sinks the company? That's an unknown risk that would be prevented by diversifying your investments.

Known risks (such as "can this company execute it's vision well enough to be profitable at 500m revenue/year?") are what you weigh against the return ("I personally think so, but the market doesn't, so I'm getting a discount on the stock price when it eventually succeeds").

Re: Amazon Reports First Quarterly Loss in 4 Years

#85

Post by busyant »

pyoung wrote: post #76
busyant wrote: post #42

Earlier quoted context omitted.

> we will need to do a better job at educating them to prepare them for more high skilled labor. What about people who can't be educated for high-skilled labor? Seems like a taboo subject, but there are a lot of people like this in the world. What do they do? * edit. These labor shake-ups are going to take place in "high-skilled" areas, too. IBM's Watson can probably be trained to be more talented at illness diagnosi…

Regarding your first point, I don't have an answer. But, for a more ironic take on the issue, please read 'Player Piano' by Vonnegut. Regarding your second point, I addressed this in the other post, but post-scarcity economics seems to be the best 'thought experiment' as to what a future society would look like. I truly believe that we are entering an age where human labor will become obsolete. It may take a while bu…

> I truly believe that we are entering an age where human labor will become obsolete. It may take a while but, its going to happen.

I think you're correct.

For me, what's difficult is to understand what happens to us at that point...and I guess what happens to us on the way to that point. I can't tell if it will be good or bad (or a mixed-bag) for us/humans.

Re: Amazon Reports First Quarterly Loss in 4 Years

#86

Post by codex »

polyfractal wrote: post #81
codex wrote: post #39

I think Amazon's profit per employee is around $6K. Compare to Apple at $600K. Amazon is practically a non-profit. Not surprising, as they play in a shitty, ghetto space--retail.

Besides what other people have mentioned, there is also the fact that Amazon employs a lot of people, and many of them are performing relatively mundane service jobs. Picking and packing products from the Amazon warehouses requires a large workforce, despite all the advancements in automatic warehousing. Profit per employee isn't really a useful number in this respect.

This is my point; that Amazon is a shitty business because they have chosen a terrible sector: retail. That's what you get when your main competitor is Walmart. Look at the absolute profit numbers: 1/40th the profits of Microsoft; 1/100th the annual profits of Apple; 1/30th the annual profits of Google.

That said, they are desperately trying to get into real tech. businesses.

Re: Amazon Reports First Quarterly Loss in 4 Years

#87

Post by polyfractal »

codex wrote: post #86
polyfractal wrote: post #81

Earlier quoted context omitted.

Besides what other people have mentioned, there is also the fact that Amazon employs a lot of people, and many of them are performing relatively mundane service jobs. Picking and packing products from the Amazon warehouses requires a large workforce, despite all the advancements in automatic warehousing. Profit per employee isn't really a useful number in this respect.

This is my point; that Amazon is a shitty business because they have chosen a terrible sector: retail. That's what you get when your main competitor is Walmart. Look at the absolute profit numbers: 1/40th the profits of Microsoft; 1/100th the annual profits of Apple; 1/30th the annual profits of Google. That said, they are desperately trying to get into real tech. businesses.

Fair point - everyone knows that retail is a razor-thin margin arena to play in.

I would argue that their profitability is a lot more stable than Apple. A few missteps and Apple is no longer the golden child. They have to continue to innovate or they lose their special status. Executing on a retail strategy is in many ways simpler than "build the next innovative consumer electronics widget...sell for astronomical price".

I'd take stock in Amazon over Apple any day.

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