How Amazon Can Blow Up Asset Management • Hacker News Board

Re: How Amazon Can Blow Up Asset Management

#61

Post by krapp » Wed, Mar 07, 2018, 1:51 PM UTC

deanCommie wrote: post #34

thisisit wrote: post #4

Amazon has a serious problem with counterfeit goods and fake reviews. One might think that with the rise of AI/ML catching fake reviews and counterfeits will be much easier but Amazon doesn't seem to be doing any thing. In which case, allowing them to handle money seems like a recipe for disaster. As for the Ant Financial comparison, I find it hard to believe that Amazon is not utilizing the reserves it gathers by se…

> but Amazon doesn't seem to be doing any thing. I would have thought that on Hackernews of all places people would recognize the scale that is involved with a site like Amazon and recognize that fixing this problem is far from trivial. I'm sure Amazon is taking it very seriously - when have they ever shown anything but "obsession" about positive customer experiences. But it is hard, and it will take time to do it ef…

I doubt Amazon even considers it an issue. The effect of negative customer experiences from counterfeit goods and fake reviews on actual sales is likely negligible, certainly less than the cost of any "improvement" to the system. Most people aren't going to delete their Amazon accounts because of a bad item - they'll just return it, and stay customers.

Meanwhile, those counterfeits allow Amazon to fulfill orders more quickly and to list items at lower cost, undermining their competition, and any bad experience a customer has can be blamed on the vendor, not Amazon itself.

Of course, I could be wrong, and I have no particular insight, but to me this seems like an intentional part of Amazon's business model.

Re: How Amazon Can Blow Up Asset Management

#62

Post by anonu » Wed, Mar 07, 2018, 2:09 PM UTC

Great thought piece. Read this carefully and certainly written by someone knowledgeable about the industry (I would hope so if he's running a hedge fund!)

I see some comments view this as a far-fetched idea. Maybe that's why its a good one....

RobinHood, the stock trading app, didn't exist 5 years ago. Now you trade for free - challenging a dozen well-known incumbent platforms like Schwab, Fidelity, etc... Luckily, these big guys offer more than just stock-trading. Imagine, zero fee trading with a fund-management platform as described by OP - I think it would crush the competition.

Re: How Amazon Can Blow Up Asset Management

#63

Post by scottlegrand2 » Wed, Mar 07, 2018, 2:24 PM UTC

barry-cotter wrote: post #43

oldcynic wrote: post #32

Earlier quoted context omitted.

> You cannot just put them all in one bin. Amazon do, that's the problem. As you provide no citations either, your assertion seems to have no more grounds. The chances of counterfeit being better quality are so vanishingly rare as to be headline worthy.

On fakes being of high quality I imagine it varies by market and supplier. If real Calvin Klein underwear is better than the thirty I got in Thailand four years ago it’s made of angel feathers and adamantium.

One of my in-laws more or less pioneered the entire clothing manufacturing industry in Southeast Asia. Watching him and his wife tear apart garments by looking at the stitches and feeling the fabric is incredibly entertaining. It's on par with the way I tear apart other people's code on GPUs. 10,000+ hours doing anything gives one some serious skill.

I've even used their expertise as evidence that AI and machine learning could do the same if we only knew how to train it. They've written several books on the subject and they are recognized authorities in Asia.

Re: How Amazon Can Blow Up Asset Management

#64

Post by [deleted] » Wed, Mar 07, 2018, 2:37 PM UTC

oldcynic wrote: post #23

fergie wrote: post #16

Earlier quoted context omitted.

> Amazon has a serious problem with counterfeit goods Or you could say that Amazon is highlighting the comparative lack of quality of branded goods. A Lacoste shirt is so easy to replicate at a fraction of the cost, that Amazon, by its very nature undermines the entire rationale for buying Lacoste.

Or quite the reverse, such as the last set of "Panasonic" batteries I bought off Amazon. After about 3 months all 12 had leaked and were dead. I'm damn sure they were not Panasonic. The reputation damage was to amazon, not Panasonic, and I resolved not to buy batteries from Amazon ever again. No doubt a fake Lacoste would disintegrate in a fraction of the time of a genuine shirt. Know what's ridiculous? I trust Pound…

[deleted]

Re: How Amazon Can Blow Up Asset Management

#65

Post by vinceguidry » Wed, Mar 07, 2018, 2:38 PM UTC

Don't financial firms have to isolate their business models? Banks traditionally couldn't offer brokerage services for instance. I can't imagine the government granting Amazon a license to operate a retail trading desk, particularly if anyone can offer products on it.

Re: How Amazon Can Blow Up Asset Management

#66

Post by sct202 » Wed, Mar 07, 2018, 2:44 PM UTC

stormbeta wrote: post #14

virgilp wrote: post #6

Earlier quoted context omitted.

> I don't trust it right now to provide me things that aren't counterfit That might be true for a small percent of HackerNews readers that are also Daringfireball readers - but the world at large still trusts Amazon; that's the whole point of the article, really. As anecdotal evidence, an Amazon Investment might be the only way to convince me to become a Prime member (if that'd be a required precondition). I'd almost…

I don't know, I've seen a lot of trust erosion in the last few years even just among people I know (many of whom don't even work in tech), largely driven by them getting burned by problems with sketchy third-party re-sellers. Unless you're paying close attention, it's not obvious to the average consumer that so many products are being sold by independent resellers vs Amazon themselves, so people aren't as careful as…

Amazon's reputation is starting to converge with Walmart imo.

Re: How Amazon Can Blow Up Asset Management

#67

Post by rubinelli » Wed, Mar 07, 2018, 2:45 PM UTC

jraby3 wrote: post #45

deanCommie wrote: post #34

Earlier quoted context omitted.

> but Amazon doesn't seem to be doing any thing. I would have thought that on Hackernews of all places people would recognize the scale that is involved with a site like Amazon and recognize that fixing this problem is far from trivial. I'm sure Amazon is taking it very seriously - when have they ever shown anything but "obsession" about positive customer experiences. But it is hard, and it will take time to do it ef…

I disagree. There seems to be so much low hanging fruit to at least reduce the problem but they haven't taken even the smallest steps. This is because they're prioritizing revenue, volume, and selection over fraud prevention.

I've seen this in other companies. It's like Amazon had a bad revenue addiction. They can't go cold-turkey and cut every suspect seller in the marketplace, because that would cause a large impact on their quarterly numbers. But if this goes untreated, it will drive out good sellers and destroy consumer confidence.

Re: How Amazon Can Blow Up Asset Management

#68

Post by daxorid » Wed, Mar 07, 2018, 2:50 PM UTC

BatFastard wrote: post #58

Lots of FicTech in my city. From friends who work for these companies. They are a mess. Amazon needs to come in revolutionize the market place. But if they did, they would get broken up. Short term question is whether Walmart will survive, I hope they do much as I despise the company. Amazon needs competitors. Longer term is will it be Alibaba vs Amazon worldwide? Interesting times...

> Short term question is whether Walmart will survive

Why do you think they wouldn't survive? $15B in free cash flow versus $46B in debt makes bankruptcy a virtual impossibility.

Re: How Amazon Can Blow Up Asset Management

#69

Post by yoodenvranx » Wed, Mar 07, 2018, 2:52 PM UTC

krapp wrote: post #61

deanCommie wrote: post #34

Earlier quoted context omitted.

> but Amazon doesn't seem to be doing any thing. I would have thought that on Hackernews of all places people would recognize the scale that is involved with a site like Amazon and recognize that fixing this problem is far from trivial. I'm sure Amazon is taking it very seriously - when have they ever shown anything but "obsession" about positive customer experiences. But it is hard, and it will take time to do it ef…

I doubt Amazon even considers it an issue. The effect of negative customer experiences from counterfeit goods and fake reviews on actual sales is likely negligible, certainly less than the cost of any "improvement" to the system. Most people aren't going to delete their Amazon accounts because of a bad item - they'll just return it, and stay customers. Meanwhile, those counterfeits allow Amazon to fulfill orders more…

> actual sales is likely negligible

At the moment it might be negligible but in the long run they are hurting them self. 5 years ago I and a lot of my friends ordered everything on Amazon because it was fast and we knew that we will get the correct stuff.

Nowadays I (and most of my friends) almost stopped using Amazon because it is such a hassle to find stuff which is actually sold and shipped by Amazon and not some sketchy third party seller with only 5 reviews. And even if you manage to order something directly through Amazon you might still have problems with counterfeit items and other stuff.

And the same is true for my parents and their friends. Until 1-2 years ago Amazon was _the_ place to shop online but nowadays they switched back to more traditional methods.

Due to all this shady stuff Amazon lost me as a customer (who used to spend hundreds and thousands of euros per year).

Re: How Amazon Can Blow Up Asset Management

#70

Post by anonu » Wed, Mar 07, 2018, 2:54 PM UTC

compsciphd wrote: post #7

obblekk wrote: post #3

If Robinhood, a start up with very few resources, can offer commission free trading, I'd bet Amazon could offer approximately 0 cost S&P500 funds. If the partnership with JP Morgan works, people could direct deposit money into their Amazon account, auto-invest into Amazon funds, and then spend on Amazon ecommerce. In this model, Amazon immediately saves ~2% on credit card transaction fees, a small portion of which co…

vanguard and fidelity offer approximately 0 cost S&P500 funds already today. you're talking .03% in fees. On a $1Mil investment that's $300 a year.

3bps is certainly dirt cheap - but thats purely explicit cost. You have to look at how the fund is managed. If the fund manager is an idiot and forgets to rebalance or makes some other error - that 3bps can pale in comparison to missing the benchmark.