Submitted by Paradox68 t3_125ui0d in wallstreetbets

I’ve been almost fully invested in Amazon for over a year now. I originally bought really high at around 150 before the entire market decided to crash. When it did, I took the opportunity to buy more and so now my avg cost is down to 102. Currently holding about 150 shares.

I want to try and gauge market sentiment on Amazon here by seeing what you all think. Is it going to continue flat around $100? Is it going to surge tomorrow? I have definitely noticed a trend for the last few weeks or even months that it tends to spike up on Wednesday and Thursdays most often. It seems like there is a lot of resistance, presumably from people who don’t fully understand the breadth of Amazon’s offerings, their leading position in ALL retail segments, and the insane investments in automation they have been/are making.

What are your thoughts?

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VisualMod t1_je5y8hp wrote

>I think that Amazon is a strong company that will continue to grow. I believe that the stock price will continue to rise in the future.

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BaldeeBanks t1_je5zfo8 wrote

Well now that you mention it, how about no.

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bradyo164 t1_je5zt5p wrote

All I have to say is when the everything bubble pops ur definitely gonna be a bag holder… all blue chip stocks r heavily over valued

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Paradox68 OP t1_je61gyx wrote

Disagree. They were overvalued at 180, sure…probably.

But at $100 a share?

Before the split that would be $2,000 a share, which is literally the price from 2019 before the Fed really started fucking things up. I think back then it was a fair value, and taking into account the MASSIVE amount of inflation we’ve seen lately, in tandem with Amazon’s growth, $2,000 a share seems too low.

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Paradox68 OP t1_je61psb wrote

What? You lost me in the analogy.

AMZN stock price has been losing lately, while the actual company only continues to grow and enter new markets. I don’t think they’re winning every race.

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Humble_Increase7503 t1_je62cxj wrote

Think it’s gonna float around these levels for awhile

Amazon hasn’t really popped with the rest of mega cap tech in the past month or so.

And, I think, it’s going to be 1-2 quarters until amazons cost cutting is going to show itself in margins and earnings, which is what I believe investors are waiting for

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CosmoPhD t1_je69w96 wrote

Yeah sorry I meant to write more but I must have hit the reply button sooner.

Amazon will recover once the Fed signals that inflation is beaten or we hit the bottom of the recession (which hasn’t happened yet).

The market is forward looking, so while we’re operating under uncertainty, like we are now, things will remain volatile.

We simply don’t know yet if inflation took a breather and is on its way back up, or if it’ll continue to fall.

Manage your money wisely!

The Fed is trying to shore up the banking system while raising the US dollar to cut out 3rd world countries from consuming too much from the international market which is mostly in USD.

Its why we’re seeing so much gripe about the US dollar from 3rd world countries. They’re angry that they’re about to slide back into poverty.

Its a sad system.

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rrocketman88 t1_je6b2tj wrote

I'm long. I could see it having a good quarter. Q4 is their biggest quarter but everyone know that. The layoffs they've announced will be good for future earnings. AWS growth has slowed which could be a problem. Who knows.

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milkman_z t1_je6ix2f wrote

At 150 shares id be selling covered calls but my regarded ass is net negative since 2020. I'm ngmi

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Optionsgamble t1_je6qwju wrote

You bought Amazon at 153x earnings that’s genuinely insane and is extremely overvalued a good valued is 20 maybe even 40x Amazon has a long way to fall to be fair value and that’s not even comparing the recession that will lower earnings further. First an Eps collapse than a p/e collapse

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Spins13 t1_je6uz7w wrote

Nah. The day a good quarter is announced it will go up 10%. Then 10% or more on the next one. No one without insider knowledge knows the numbers before they show up. It will stay flat until better results and may even dip with S&P.

In 5 years it will be at least 180$. I wouldn’t worry too much about the near future if you are playing the long game

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Spins13 t1_je6w4z9 wrote

Don’t be too worried about AWS. It is by far the best Cloud Service Provider and they will own the market with Microsoft second. It is an unbreakable moat. This means they will be able to jack up prices once market is saturated in 10-15 years

Also remember that a good part of their revenue and earnings are not USD. Thus currency plays in with a very strong dollar in 2022

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No_Grapefruit4066 t1_je6xk2f wrote

Watch the market response to Alibaba splitting into 5 companies. If Amazon does that, we could see a 25% jump from here.

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Tensleepwyo t1_je730rm wrote

Traditionally on Thursday’s the market goes up or down.

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Paradox68 OP t1_je7aswf wrote

Yeah AWS isn’t going anywhere. Just because it’s not growing as rapidly doesn’t concern me at all. Of course they’re not going to grow rapidly… it started with them being the new player to cloud compute, then they basically undercut the entire market, quickly became the most popular (or one of?) cloud service provider, and now they’re leveling off. Thing with investors is they see things like this and get scared there’s going to be a nosedive, because traditionally, that would be a more likely scenario given that limited information. However, AWS is still going strong. There are just less and less people who are not using AWS every day, so the pool of people who can migrate to their services shrinks.

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Paradox68 OP t1_je7b9w7 wrote

Just buy Amazon shares dude. As soon as you start trading Futures (Options) you have entered “total gambling”

There’s investing, then there’s high risk investing (basically gambling), and then there are Options (total gambling). You’re trying to time the market which is usually not going to work out, unless you have some good information.

Buying shares there is no time limit. If you believe they’ll go up in the mid-long term, just buy shares. Going too far out, you’ll pay too much of a premium on the Options and increase your chances of losing it all. Just buy AMZN shares.

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Paradox68 OP t1_je7bul1 wrote

I don’t understand the benefits to a shareholder of a company splitting into segments? Also what does this really change? Amazon (and Alibaba) already have a million subsidiaries. This just seems like a dumb way to avert Monopoly regulation to me, but I’ll admit I don’t know all the facts there, obviously.

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ldmonko t1_je7ci59 wrote

stopped reading at 150 shares !!

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juniorlaxma t1_je7f7sk wrote

Amazon added 750k workers, out of which about 150k were white collar workers, in 2 years and opened a whole lot of fulfillment facilities. This is a huge drag on their cash flows. They need to cut way more than the 27k they announced to turn things around on cash flow basis. Unless they take steps in that direction or announce new lines of revenue I do not see it turning around. So you might see it in the 90 to 100 zone for some time. If you are in it for the short term, try and exit at close to 110.

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baldmo t1_je7gknj wrote

Nobody tell him the bubble started in 2014

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No_Grapefruit4066 t1_je7ka3u wrote

I think the main premise here is that smaller businesses with more focused management will attract investor attention and help reduce the conglomerate discount. These businesses can merge, acquire or divest their businesses with less scrutiny and will be more responsive to activist shareholders.

Given the focus on efficiency rather than growth at all costs, shareholders and regulators may like smaller companies that emerge

This is yet a theory

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Paradox68 OP t1_je7n4ug wrote

You do realize that sometimes employee wages being paid is a good thing right? The way you approach this makes it sound like you could believe that Amazon would be most efficient with 0 employees. Which could be true later, but that’s not for at least another 10-30 years.

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asianrockstar2009 t1_je7nij2 wrote

Holy hell you must of bought 2/3 of your position at $84 to average down that hard from $150 all the way to $102. You had the balls to actually buy the falling knife.

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Paradox68 OP t1_je7nm6k wrote

Yes. Like I mentioned, I had a small buy in at first but when it dipped I took that opportunity to buy more, considerably more (relatively)

It’s a bit embarrassing to admit, but some shares were also lost along the way to MC. Yes I am aware of the risks of trading on margin.

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Paradox68 OP t1_je7q4jx wrote

See, but as I kind of said in another comment… If you wait for the “dust to settle”, you’re already too late. A lot of people think like that and it’s a very common fallacy. Buy it while it’s still meeting a lot of resistance.

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Paradox68 OP t1_je7sgld wrote

I’m just wondering what his deal really is. Is $15k such a small amount of money to this person that they wouldn’t even bother reading the rest of the post (which had nothing to do with my position anyways, I was just doing that to cooperate with the rules of the Sub)

Or maybe they’re just so bad with their ADHD that two paragraphs is simply impossible to sit through.

All in all, it’s really sad because I know for a fact that they did read the entire post, they’re just trying to seem snide and witty, at my expense. It’s sad we can’t just have a discussion.

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Paradox68 OP t1_je7t9kp wrote

Where are you pulling this number? 50,000 employees? What departments? Which employees? Do you even understand the logistics that must go into layoffs to ensure it’s a good move for the business? Do you even understand the amount of money that is spent researching that data before they even come to a decision?

50,000 people out of a job for what? I agree that “trimming the fat” occasionally is completely necessary, if not, mandatory for a business to succeed, but you can’t just look at it like it’s a singular data point. “Well on average the employees there make $100,000/yr so if we cut 50,000 jobs we’ll be up $5,000,000,000 a year in revenue!” Has too many fallacies and oversimplifications to comment on.

There are a lot of other, more effective measures a business can take on such a massive operational scale to cut costs.

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LOLatVirgins t1_je7tkkh wrote

It’s WallStreetBets, bro. You can’t expect to take anyone serious here anymore. They only care about their 0dte SPY calls that expire worthless.

r/stocks or r/ValueInvesting is where you wanna be.

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SherkPentagram t1_je81e1v wrote

He’s telling you to sell them, not buy them though. Basically, if you wanted to sell 100 shares when it hits $140 again, you could just sell a covered call at a strike price of $140 with months until expiration, and get paid while you wait for it to hit the price you were gonna sell at anyways. Or it doesn’t hit $140 by then and you keep your shares and the money you got for selling the call.

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Paradox68 OP t1_je8apyf wrote

Something doesn’t add up there. Where’s the part where I lose all my money? When does that happen?

EDIT: nevermind, I had ChatGPT explain in more detail, and then give me a dumbed down version of both sides. I understand everything now.

E V E R Y T H I N G

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d3nv3rite t1_je8f8eo wrote

Amazon is growing into a conglomerate, similar to how General Electric was 20 years ago, where they are trying to do everything. The problem is that each part of their business has different growth opportunities, which in some cases may actually be hurt due to each business unit having to compete with other business units for capital. An example of this is Amazon Logistics. If spun off into a separate company it could rival UPS & FedEx, and 3rd party retailers would be more likely to ship with Amazon if the delivery business is separated from the retail business. Whole Foods also hasn't done very well under Amazon's leadership, as their focus on technology & online delivery has ruined the store experience with "shoppers" filling the aisles to pick internet orders. These are just a couple examples of business units in Amazon that might be worth more if spun off into independent companies.

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Paradox68 OP t1_je8fl3j wrote

>and 3rd party retailers would be more likely to ship with Amazon if the delivery business is separated from the retail business

Why do you think this? Like I said, anyone with a brain would still understand that it’s still Amazon or owned by Amazon. And that using the business benefits Amazon in one way or another. Retailers don’t ship with Amazon because they are competing with Amazon. Even if it was separated, they would still know that using Amazon to ship would detriment their business inherently by helping Amazon.

Like I said, it’s all asinine.

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d3nv3rite t1_je8gj3i wrote

Do you work for Amazon? I am a consultant hired by Fortune 500 companies to help them plan layoffs. You would be surprised how bloated some companies got during the last few years, as hiring shortages caused them to hoard talent. Many of the positions that should be eliminated include excess layers of management. Did you know Amazon has 12 layers of management between an hourly worker & the CEO? That is a lot of "middle management" that don't create value to customers, but instead spend their time in meetings with other middle managers. These administrative and program management roles can actually slow the organization down because the chain of approvals gets too big for decision-making to occur in an efficient manner.

I'm not advocating for layoffs, but I equally disagree with the stance that layoffs are bad. The US government shows how disfunctional things can get when there are too many layers of leadership. My fear with Amazon is they have grown into an organization with too many silos & layers that will prevent them from continuing to innovate effectively. It is apparent to the outside that this is happening, as Amazon hasn't rolled out many new things for customers in recent years except on the AWS front. To fix this, Amazon either needs to split up into separate companies or carefully assess their corporate staffing to ensure the ratio of managers vs productive team members makes sense.

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Paradox68 OP t1_je8ho60 wrote

First four sentences are entirely anecdotal so I’ll ignore it entirely.

-12 layers thing is semi bullshit. Every company has these layers you’re describing, they’re called departments. Even at my job, we have my local team, then we have the manager of that team, then we have the department lead, then that guy has a manager who is the director, then that director has a team of other directors and all those directors are part of another team and that team reports up to either another department or the C-level, depending on how big the company is. Let’s make this clear, I’m NOT saying that companies aren’t bloated, they are. I know that, everyone knows that. The thing you’re not understanding is that if there are departments dedicated to researching and actioning the effectiveness of layoffs, then it becomes a non-issue for the business because it’s ever-changing. It’s obviously too complex of an issue to encapsulate here, or to come up with one cut and dry solution, so I guess I don’t understand why you think you know more than the people at Amazon who are actually paid to do this.

Still waiting on an answer from the other guy on where he pulled 50,000 from

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rain168 t1_je8vx9p wrote

Not when Jassy is still the CEO.

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Paradox68 OP t1_jea0e6k wrote

… uh huh.

You know, I don’t usually gloat when I’m right, but didn’t I say it would surge today? I almost feel sorry for you almost, but I don’t. You’re welcome to anyone that listened.

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Ma4r t1_jeayww0 wrote

It surged 1.7% ,that's barely a $300 increase for a $15.000 investment... The risk reward ratio is insane considering that tech startups are getting fucked while the big customers are cutting costs and looking to move inhouse for their hosting purposes.

I also believe that the only reason amazon jumped today was just the general stock market being up with many other stocks today having a 2% jump and more which are way better investments than amazon. So from an opportunity cost perspective you actually missed out on a significant amount on this investment.

Edit: It's already down to 1.3% if you didn't come out of the trade during day highs . Considering last year inflation was at 6% you're still losing money in this 1 year trade imgimgimg

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Prestigious_Ear_3737 t1_jedbobi wrote

You asked for people's opinions yet you counter everyone who tries to answer you. You need to read some history on how the market performs during QT. Forget forward looking during this period. The market capitulates after the first rate cut. Amazon will probably go to about $60 a share, minimum. Fundamentals are also important. They trade at way too high a P/E.

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Prestigious_Ear_3737 t1_jeeg7dt wrote

I am sorry you were not interested in serious replies to your inquiry. My replies to you were thoughtful and based on history and fundamentals. It is sad that you are not open to learning or researching your positions. You are most likely doomed to losing.

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Paradox68 OP t1_jeem8om wrote

Based on history huh? You pulled a number out of your ass, dude. There’s no history that would indicate anything like that happening unless there was a complete market crash. I choose not to subscribe to your 🌈🐻 beliefs, that doesn’t make me sad. Quite the opposite. Thanks 🙏

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