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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

#31

Post by lotsofpulp »

icefox wrote: post #22
lotsofpulp wrote: post #14

Earlier quoted context omitted.

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…

Hmmm I wouldn't normally say a P/E of 272.63 is a bet on slow steady growth.

I agree, but it seems to be a fundamentally different scenario than other companies with sky high P/Es such as LNKD and FB. While LNKD and FB have yet to figure out how to monetize their product, AMZN has a relatively simple (and demonstrated) growth plan. I think many investors are simply betting that Amazon will be able to capture significantly more of the retail market, and/or new revenue streams from places like cloud services.

Re: Amazon Reports First Quarterly Loss in 4 Years

#32

Post by ars »

pyoung wrote: post #29
iyulaev wrote: post #17

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?

That is a difficult question to answer. A good parallel to what amazon is doing to retail is what globalization did to manufacturing. As we all know, manufacturing in the US has been gutted and is now largely based in developing countries. While this is good for the consumer because products are cheaper, this also resulted in a great deal of unemployment for a certain category of workers (primarily low skill). Retail…

> As we all know, manufacturing in the US has been gutted and is now largely based in developing countries

We all know it, and yet it's not actually true. America is the largest manufacturer in the world.

The main that happened is America switched from making many multiples of cheap item, to making smaller quantities of much more expensive and complicated items.

Re: Amazon Reports First Quarterly Loss in 4 Years

#33

Post by pyoung »

gareim wrote: post #27
ChuckMcM wrote: post #25

Earlier quoted context omitted.

Back during the dot.com days Yahoo Finance had a game where you could "play the market." (take note entrepreneurs this could be a lifestyle business :-) For each group you got $100,000 to invest and you were in competition with other people in your group for best return. I lost about $75,000 on Amazon stock :-). However, my actual portfolio has done ok with Amazon so I'm not complaining.

I did something similar to this in high school a few years ago. I ended up losing to another team in the class that bought Gamestop and other related stocks. I stuck with stocks like Intel and GE. If the game had ended even a two weeks later, I would have won. These games teach high school students very little about investing, especially long term. The other team's strategy was simply "I play video games and I like G…

For non-professional investors, the "so let's buy Gamestop" strategy isn't necessarily a bad strategy. Assuming you are putting the bulk of your investments in low cost index and mutual funds, using a little bit of you savings to play the market by investing in companies that you are familiar with can be productive. I've had some big hits and some big misses, but overall, my picks have matched the pace of my index/mutual funds.

Re: Amazon Reports First Quarterly Loss in 4 Years

#34

Post by WalterBright »

pyoung wrote: post #29
iyulaev wrote: post #17

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?

That is a difficult question to answer. A good parallel to what amazon is doing to retail is what globalization did to manufacturing. As we all know, manufacturing in the US has been gutted and is now largely based in developing countries. While this is good for the consumer because products are cheaper, this also resulted in a great deal of unemployment for a certain category of workers (primarily low skill). Retail…

I don't believe that. Throughout history, labor-saving machinery has put people out of work, and they become available labor for entirely new industries.

For example, there's a growing industry now of digitizing the zillions of documents, books, photos, movies, art, etc. This is low skilled labor.

Or Apple/Google/Microsoft sticking camera hats on people and having them hike trails to develop maps.

The list is endless.

Re: Amazon Reports First Quarterly Loss in 4 Years

#35

Post by WalterBright »

ars wrote: post #32
pyoung wrote: post #29

Earlier quoted context omitted.

That is a difficult question to answer. A good parallel to what amazon is doing to retail is what globalization did to manufacturing. As we all know, manufacturing in the US has been gutted and is now largely based in developing countries. While this is good for the consumer because products are cheaper, this also resulted in a great deal of unemployment for a certain category of workers (primarily low skill). Retail…

> As we all know, manufacturing in the US has been gutted and is now largely based in developing countries We all know it, and yet it's not actually true. America is the largest manufacturer in the world. The main that happened is America switched from making many multiples of cheap item, to making smaller quantities of much more expensive and complicated items.

The CNC mills have revolutionized small production runs. For example, it used to be very hard to restore old cars for which parts were no longer available. For example, decades ago a guy down the street restored some old Mercedes limousine he showed me, and I asked him how he dealt with the unavailablity of parts. He said "oh, I just made them" and showed me his fully equipped machine shop in his basement.

That can now be done with a simple CNC machine.

A lot of shops have sprung up that apparently have libraries of CNC designs, and they manufacture the parts on demand.

Re: Amazon Reports First Quarterly Loss in 4 Years

#37

Post by pyoung »

ars wrote: post #32
pyoung wrote: post #29

Earlier quoted context omitted.

That is a difficult question to answer. A good parallel to what amazon is doing to retail is what globalization did to manufacturing. As we all know, manufacturing in the US has been gutted and is now largely based in developing countries. While this is good for the consumer because products are cheaper, this also resulted in a great deal of unemployment for a certain category of workers (primarily low skill). Retail…

> As we all know, manufacturing in the US has been gutted and is now largely based in developing countries We all know it, and yet it's not actually true. America is the largest manufacturer in the world. The main that happened is America switched from making many multiples of cheap item, to making smaller quantities of much more expensive and complicated items.

I suppose I should change the language of my post to say that "manufacturing employment has been gutted", as that is what I actually meant.

You are correct, there has been a resurgence in manufacturing in the US. The issue is that these new facilities are much more autonomous then their predecessors, and they are not going to result in pre-1980 manufacturing employment levels. While output may reach record highs, employment won't.

Re: Amazon Reports First Quarterly Loss in 4 Years

#38

Post by ridiculous_fish »

iyulaev wrote: post #17

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?

Brick and mortar stores are essentially free showrooms for online retailers. How many of us decide which TV to buy at Best Buy, and then get it for less at Amazon?

We may not like the consequences if B&M retailers are driven out of business, and we're forced to rely on dubious online reviews to make purchasing decisions.

Re: Amazon Reports First Quarterly Loss in 4 Years

#40

Post by pyoung »

WalterBright wrote: post #34
pyoung wrote: post #29

Earlier quoted context omitted.

That is a difficult question to answer. A good parallel to what amazon is doing to retail is what globalization did to manufacturing. As we all know, manufacturing in the US has been gutted and is now largely based in developing countries. While this is good for the consumer because products are cheaper, this also resulted in a great deal of unemployment for a certain category of workers (primarily low skill). Retail…

I don't believe that. Throughout history, labor-saving machinery has put people out of work, and they become available labor for entirely new industries. For example, there's a growing industry now of digitizing the zillions of documents, books, photos, movies, art, etc. This is low skilled labor. Or Apple/Google/Microsoft sticking camera hats on people and having them hike trails to develop maps. The list is endless…

Both of those examples seem like temporary solutions at best. And robotic tech already exists that could theoretically replace humans for those tasks.

I may read too much sci-fi, but I am fully convinced that we are heading to a future where most menial, low skill tasks will soon be done by technology and robotics. We have been heading in that direction for quite some time and I don't see that changing. The end result is the near elimination of low skill jobs. This doesn't necessarily mean that people won't be able to find work, it's just that we will need to do a better job at educating them to prepare them for more high skilled labor.

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