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aka0007 t1_j25kz9x wrote

I hate dumb lists... It reminds me of some people with political discussions who have lists of irrelevant things to post in response to any reasonable discussion, even if the list makes no sense.

Now, to be clear I think AMZN is a great company and have invested in them before and made good money if that investment, but I did sell a little while back because I was having trouble with the value case for them (not that my other investments did much better, but felt it was time to pull out of AMZN...).

So let's take a look at your list for the heck of it.

  1. CES 2023 on Jan 5th. - Who cares. This is an annual event that has zero impact on the long-term fundamentals of AMZN.
  2. Earnings Feb 1st. - And so? Every company that has declined in value had earnings at some time or another as well as every company that has gone up. It is just a day that info may come out that will move the price, not a guarantee which way.
  3. Last years Feb earnings was the biggest move in stock market history (+14%). - As they say in investing... prior results do not guarantee future performance.
  4. CPI Jan 12th. - So invest one way or another in SPY as that reflects the impact of CPI better than an individual stock.
  5. UMICH Jan 13th. - No clue what this means
  6. New 52W low. - Whoopee doo... Every stock before it reaches it current 52 week low, reached a prior one... which means nothing. Stocks can go up or down regardless of lows or highs.
  7. They pump the stock Feb/March because the number stock refreshers to employees is based on average Feb share price. - Ok... not even going to bother with this.
  8. Consensus EPS is a softball. - I think the consensus for Q4 is $0.20, which comes to under $1 annualized, which means AMZN is trading at a 85X+ PE ratio.
  9. Cost-cutting happening right now (layoffs 10%, Alexa deprioritized). - cost cutting is necessary but perhaps sales will be down and profits impacted in any case... meaning the cost-cutting is keeping things afloat as opposed to making them profitable.

My take... maybe it goes up, maybe it goes down... definitely this DD you have done is crap though.

Maybe try real DD next time... Like if you exclude AWS from the picture, AMZN lost $10 billion in the last 12 months. Or how if you exclude AWS, AMZN barely makes money. As to AWS, during the last few years growth was very strong, but has recently slowed down. In any case would take several years of strong growth to justify even current share prices. Basically an investment in AMZN is a bet that they can turn their retail business not a massive money-maker and that AWS will continue to show strong growth for the next 5 years. My guess is Q4 will not answer these questions and will leave a lot of doubt as to the future potential of AMZN and if it can grow fast enough to justify the share price.

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Sarfbot t1_j2fijfj wrote

I don’t disagree that OPs list is useless. You also brought up good points which I mostly agree with.

  1. One callout is that Alexa was a $6B+ cost losing business. They’ve cut down Alexa and devices investments completely.
  2. The pendulum of “growth vs cost efficiency” has fully swung towards efficiency now. With Andy’s recent email confirming cost cutting and layoffs in Q1 and possibly throughout the year, Amazon will be profitable. No doubt in my mind.

As large as Amazon is, I truly don’t know a more nimble tech company. When pressures to increase minimum wage rose, they made the decision literally over the weekend to raise their minimum wage to $15/hr. Friday the motion was discussed, Monday it was announced and the following week it was instated. For reference, Target and Disney committed to the same goal but said they’ll need 1-2+ years to implement this.

Another reference is the year before pandemic. They had pivoted to cost cutting and increased their EPS to $14/share, from negative EPS six quarters straight.

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