Do you have adblock enabled?
 
If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(Slate)   Amazon's fourth quarter earnings are in, and their little smiley arrow needs to be turned upside down   (slate.com ) divider line
    More: Fail, Amazon, account of profits  
•       •       •

1919 clicks; posted to Business » on 29 Jan 2013 at 8:55 PM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



60 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest


Oldest | « | 1 | 2 | » | Newest | Show all

 
2013-01-29 07:51:01 PM  
I ordered a thing for $45. I put in the wrong address. Totally my fault, which I said in an email to them to see what I should do. They refunded me $98, told me to reorder it, next day shipping and they'd refund the shipping cost.

I have no idea why they refunded me twice what I paid.
 
2013-01-29 07:56:53 PM  

Earpj: I ordered a thing for $45. I put in the wrong address. Totally my fault, which I said in an email to them to see what I should do. They refunded me $98, told me to reorder it, next day shipping and they'd refund the shipping cost.

I have no idea why they refunded me twice what I paid.


Did you tell them that?  How is that not stealing?
 
2013-01-29 08:06:20 PM  
Matthew Yglesias has had a hard-on for Amazon for years because he doesn't understand they are building a monopoly.

Amazon is trying to corner three markets, but Yglesias only ever focuses on one: mail order retail.  The other two are generic cloud services and entertainment services.  If Amazon wins cloud and entertainment, then they're going to be in a position to start cutting into Apple's profits substantially.  That's why the shareholders are letting them lose money now.  The real competition short term is Amazon and Netflix.  Long term competition is going to be over licensing for content, and Amazon is training people already with their Prime memberships.

As for cloud services, Apple belatedly got into that game, but Amazon is making a huge push into the commercial sector (hence the grand reddit outage last year).  Apple is not.  Once Amazon is hosting every damn server of any importance in the US, do you think they won't tweak the prices a bit?
 
2013-01-29 08:20:57 PM  

hb0mb: Earpj: I ordered a thing for $45. I put in the wrong address. Totally my fault, which I said in an email to them to see what I should do. They refunded me $98, told me to reorder it, next day shipping and they'd refund the shipping cost.

I have no idea why they refunded me twice what I paid.

Did you tell them that?  How is that not stealing?


I replied to the email, but I haven't heard back yet.
 
2013-01-29 08:36:10 PM  

hb0mb: Earpj: I ordered a thing for $45. I put in the wrong address. Totally my fault, which I said in an email to them to see what I should do. They refunded me $98, told me to reorder it, next day shipping and they'd refund the shipping cost.

I have no idea why they refunded me twice what I paid.

Did you tell them that?  How is that not stealing?


You take pennies from the tray, right?
 
2013-01-29 09:04:25 PM  
They are in for the long term profit.
 
2013-01-29 09:04:50 PM  
You know what else was flip-turned upside down?

/I'd like to take a minute
//just sit right there
 
2013-01-29 09:07:01 PM  

CheetahOlivetti: hb0mb: Earpj: I ordered a thing for $45. I put in the wrong address. Totally my fault, which I said in an email to them to see what I should do. They refunded me $98, told me to reorder it, next day shipping and they'd refund the shipping cost.

I have no idea why they refunded me twice what I paid.

Did you tell them that?  How is that not stealing?

You take pennies from the tray, right?


For the crippled children?!
 
2013-01-29 09:10:01 PM  

Earpj: I ordered a thing for $45. I put in the wrong address. Totally my fault, which I said in an email to them to see what I should do. They refunded me $98, told me to reorder it, next day shipping and they'd refund the shipping cost.

I have no idea why they refunded me twice what I paid.


Not the first time they've made a mistake in the customers favor, which I don't think many people will complain about haha. I ordered a DVD set for ~$25 but there was a shipping error from the seller so I cancelled my order. Then reordered from a different seller. Amazon refunded my $25 but then I guess thought they had double charged me and refunded the second $25, effectively giving me the DVD for free. I called twice and spoke to them twice about the matter, but couldn't get them to take my money no matter how I explained it.
 
2013-01-29 09:10:15 PM  

BalugaJoe: They are in for the long term profit.


Long-term investing for their corporate future... FTW!

If more companies did that, we'd be booming right now.
 
2013-01-29 09:10:38 PM  

Lsherm: Matthew Yglesias has had a hard-on for Amazon for years because he doesn't understand they are building a monopoly.

Amazon is trying to corner three markets, but Yglesias only ever focuses on one: mail order retail.  The other two are generic cloud services and entertainment services.  If Amazon wins cloud and entertainment, then they're going to be in a position to start cutting into Apple's profits substantially.  That's why the shareholders are letting them lose money now.  The real competition short term is Amazon and Netflix.  Long term competition is going to be over licensing for content, and Amazon is training people already with their Prime memberships.

As for cloud services, Apple belatedly got into that game, but Amazon is making a huge push into the commercial sector (hence the grand reddit outage last year).  Apple is not.  Once Amazon is hosting every damn server of any importance in the US, do you think they won't tweak the prices a bit?


You know who else tried to fight a war with too many fronts?

/ had to do it
 
2013-01-29 09:16:48 PM  
Someone at slate is going to be realllly bummed at what amzn is doing in after hours trading today....

/hint - they are up 9%
 
2013-01-29 09:17:35 PM  

Mitch Taylor's Bro: Lsherm: Matthew Yglesias has had a hard-on for Amazon for years because he doesn't understand they are building a monopoly.

Amazon is trying to corner three markets, but Yglesias only ever focuses on one: mail order retail.  The other two are generic cloud services and entertainment services.  If Amazon wins cloud and entertainment, then they're going to be in a position to start cutting into Apple's profits substantially.  That's why the shareholders are letting them lose money now.  The real competition short term is Amazon and Netflix.  Long term competition is going to be over licensing for content, and Amazon is training people already with their Prime memberships.

As for cloud services, Apple belatedly got into that game, but Amazon is making a huge push into the commercial sector (hence the grand reddit outage last year).  Apple is not.  Once Amazon is hosting every damn server of any importance in the US, do you think they won't tweak the prices a bit?

You know who else tried to fight a war with too many fronts?

/ had to do it


BEZOS!
 
2013-01-29 09:20:45 PM  
I just bought frankenwinnie 3D/bluray/DVD/DC for my wife,

Not to mention the melody sheep version which is why I wanted to buy it anyway.

http://m.youtube.com/watch?v=-OkeJd5sx40
 
2013-01-29 09:21:28 PM  
Also,

Prime > Netflix
 
2013-01-29 09:23:43 PM  

JolobinSmokin: Prime > Netflix


Ummmm... No. Just... No.
 
2013-01-29 09:26:32 PM  
Amazon has been "playing the long game" for 10 years now.

Every time they seem on the cusp of starting to make reliable profits (you know, the job of a company), along comes yet another emerging opportunity Amazon decides they need to plow all their free cash into. Book > Online Retail > Media > Cloud Computing > Mobile Computing.

While the path is pretty logical, there will come a time when the Long Game strategy needs to stop and profits need to start being built.

Apple announces record sales. Record units shipped. Record growth in China. Record earnings. Record profits. They get nailed in after hours trading 10%. Currently trading at only 3x cash on hand (of which, Apple has $130 Billion laying around).

Amazon announces yet another quarterly loss. In it's history, the company has only created $5 Billion in total profit - just over 1/3 of Apple's profit from one quarter. Somehow, the company that has only made $5B is run by a guy who's net worth in Amazon stock is worth $26B. And yet, Amazon's stock goes up in after hours trading?!?!?

Rational markets my ass...
 
2013-01-29 09:31:00 PM  

NewportBarGuy: Ummmm... No. Just... No.


I'm a loooong time prime customer and I have to agree. their catalog and menu browsing is for shiat. But I have little to no doubt it will be better than netflix and in a relatively short amount of time. they just need to break that shiat off from the purchase store and make it a standalone portal to the free prime and rental shiat.
 
2013-01-29 09:34:21 PM  

dr-shotgun: Amazon announces yet another quarterly loss. In it's history, the company has only created $5 Billion in total profit - just over 1/3 of Apple's profit from one quarter. Somehow, the company that has only made $5B is run by a guy who's net worth in Amazon stock is worth $26B. And yet, Amazon's stock goes up in after hours trading?!?!?


It's all about the NPV of the future cash flows from the stock. If the market thinks that in the long term the growth plus dividends is less today than it was yesterday, the stock is worth less. Has nothing to do with past performance or even the performance of another stock. You're comparing apples and oranges here, really.
 
2013-01-29 09:39:28 PM  

dr-shotgun: Amazon has been "playing the long game" for 10 years now.

Every time they seem on the cusp of starting to make reliable profits (you know, the job of a company), along comes yet another emerging opportunity Amazon decides they need to plow all their free cash into. Book > Online Retail > Media > Cloud Computing > Mobile Computing.

While the path is pretty logical, there will come a time when the Long Game strategy needs to stop and profits need to start being built.

Apple announces record sales. Record units shipped. Record growth in China. Record earnings. Record profits. They get nailed in after hours trading 10%. Currently trading at only 3x cash on hand (of which, Apple has $130 Billion laying around).

Amazon announces yet another quarterly loss. In it's history, the company has only created $5 Billion in total profit - just over 1/3 of Apple's profit from one quarter. Somehow, the company that has only made $5B is run by a guy who's net worth in Amazon stock is worth $26B. And yet, Amazon's stock goes up in after hours trading?!?!?

Rational markets my ass...


I was actually wondering about that. $5 billion since, what, 1995? Wow. I admit that I don't know much about investing, but that seems crazy.
 
2013-01-29 09:42:55 PM  

Shaggy_C: dr-shotgun: Amazon announces yet another quarterly loss. In it's history, the company has only created $5 Billion in total profit - just over 1/3 of Apple's profit from one quarter. Somehow, the company that has only made $5B is run by a guy who's net worth in Amazon stock is worth $26B. And yet, Amazon's stock goes up in after hours trading?!?!?

It's all about the NPV of the future cash flows from the stock. If the market thinks that in the long term the growth plus dividends is less today than it was yesterday, the stock is worth less. Has nothing to do with past performance or even the performance of another stock. You're comparing apples and oranges here, really.


Does Amazon pay dividends?
 
2013-01-29 09:45:12 PM  

Shaggy_C: You're comparing apples and oranges here, really


More like apples and grand pianos. The entire comment is a non sequitur. He seems to think , well, I actually don't know what he thinks. I just know it's wrong.
 
2013-01-29 09:47:48 PM  

JohnBigBootay: Shaggy_C: You're comparing apples and oranges here, really

More like apples and grand pianos. The entire comment is a non sequitur. He seems to think , well, I actually don't know what he thinks. I just know it's wrong.


So "the market" thinks that one day they'll be able to make a profit on the Amazon stock they're buying today? On what is based?

/ honestly trying to learn something here
 
2013-01-29 09:48:43 PM  
On what is THAT based?

/ honestly trying to learn how to proofread posts before hitting "Add Comment."
 
2013-01-29 09:50:50 PM  

Mitch Taylor's Bro: Does Amazon pay dividends?


of course not.
 
2013-01-29 09:59:58 PM  

Mitch Taylor's Bro: Does Amazon pay dividends?


Nope, they expressly state that they do not pay and do not ever intend to pay dividends. That being the case, my statement about net present value can be simplified a bit. The current price of the stock should be approximately equal to the anticipated future earnings of the company discounted by some anticipated interest rate. If I remember correctly, discounting by that method (sort of like a perpetuity) is approximately 20 years or so. So to understand the price of the stock (from an economic standpoint, at least), you have to look at the A = L + SE and figure out the current SE to get the "true" current value of the company; and the discounted 20 year increase in SE should equal the remainder. Been too long since I looked at time value of money...
 
2013-01-29 10:03:53 PM  

Mitch Taylor's Bro:
Does Amazon pay dividends?


Nope

"We have never declared or paid cash dividends on our common stock. We intend to retain all future earnings to finance future growth and, therefore, do not anticipate paying any cash dividends in the foreseeable future."

Yglesias is right in that Amazon is, at this point, being run essentially as a non-profit organization. What he ignores, as mentioned earlier, is that the only logical outcomes for this enterprise are 1) investors force them to turn profits before they obtain monopoly status and prices go up or 2) Amazon reaches monopoly status and prices go up. Low prices with no profits are unsustainable in the long-term.
 
2013-01-29 10:09:08 PM  

Shaggy_C: It's all about the NPV of the future cash flows from the stock. If the market thinks that in the long term the growth plus dividends is less today than it was yesterday, the stock is worth less. Has nothing to do with past performance or even the performance of another stock. You're comparing apples and oranges here, really.


Past performance is the greatest predictor of future performance.

In the last 15 years, Apple has transformed:

- Music players. (Dominant, but they canabalized themselves)
- Music buying. (Making more money than anyone in the space)
- Television/Movie Purchasing & Rental (Making more money than anyone in the space)
- Celular Phones (Making 75% of the entire headset market revenue)
- Invented an entire App ecosystem. (Utter domination over everyone else, rev/download wise)
- Mobile Computing (Only company making money, competitors are sold as loss leaders)

At this point, Apple can essentially pick and choose nearly any market to enter into. Their entire ecosystem (500 Million users with credit cards, trained on iOS and with a proven track record of spending money) will be brought with them into whatever market they decide to execute on next. The most likely target is television, but the problem is a thickets nest of big, dumb companies in the content and delivery stream. Apple is hacking (slowly) through that thicket now and they already have something on the order of 5 million devices pre-installed in homes, waiting to be woken up (their AppleTV hobby).

At it's core, Amazon is a company that has very successfully learned to cut out middlemen. Instead of resting on their laurels and making boatloads of money though, they have decided to extend themselves into markets where they play a simple strategy - offer the product at a loss leading price to gain market share. See: Media streaming. Cloud computing. Tablet and (presumably soon) phones. Every single one of these initiatives is losing the company money and the strength of the initial middle-man-cutting business is acting as a miasma for the fact that Amazon is hemorrhaging money in these other endeavors.

I grock that the price of a stock is really the NPV of the perception of future cash flows. The trouble is, Amazon keeps making bets based on the strength of their core business and doubling down on those bets every time Bezos sees a new market opportunity coming along. At this point, Amazon needs to make good on multiple large bets in order for this strategy to have paid off. If it doesn't work, the whole thing will be a tremendous fiasco.
 
2013-01-29 10:17:26 PM  

dr-shotgun: I grock that the price of a stock is really the NPV of the perception of future cash flows. The trouble is, Amazon keeps making bets based on the strength of their core business and doubling down on those bets every time Bezos sees a new market opportunity coming along. At this point, Amazon needs to make good on multiple large bets in order for this strategy to have paid off. If it doesn't work, the whole thing will be a tremendous fiasco.


Or, alternatively, the value of the stock will slowly drop as their ability to raise capital and expand becomes tempered by their lack of profitability. The point here is that Amazon is constantly chasing top line growth, and that is what excites investors. There is something to the idea that we should look at the 'gap' between stockholders equity (the liquidation price of the corporation if you were to shutter it today) and the market capitalization (the price per share x number of shares). If that gap is growing (i.e., the stock price is increasing faster than the increase in equity) you're seeing is evidence that investors expect there to be continued growth in the future. As soon as that perception starts to fade, the gap will shrink again. I don't expect it will be a boom-bust type of thing, it will be a more long, slow, steady decline, just like the brick and mortar retailers Amazon replaced.
 
2013-01-29 10:19:23 PM  

Mitch Taylor's Bro: So "the market" thinks that one day they'll be able to make a profit on the Amazon stock they're buying today? On what is based?

/ honestly trying to learn something here



Well, for starters, AAPL's dollar value of profit in a quarter, the value of Bezos' stock options, and the profit generated by AMZN since inception... have fark all to do with each other. It's not unlike saying Manning expects to have a great game on home ice as long Clemens can keep throwing strikes. They are all words in english vaguely related to the stock market but one has little to no relation ship to, or effect on, the other. But I think he's mad aapl made a ton of profit yet their stock price went lower. what he might want to look at with respect to aapl, is profit growth. these numbers are not exact - but the last three years their profit growth was almost 70, then 40 something, then 11% - see the trend? That's not to say aapl is not an amazing company - they are one of the most amazingly profitable companies in history. But growth investors are looking for - you guessed it - profit growth. Apple is a very big ship and that ship has slowed rapidly. very, very profitable . but their profit growth has slowed to the point that investors are wondering if they might get better growth elsewhere. very natural. Why some people take it as if you said something mean about their mother, I have no idea. No one has to peel the apple sticker off their jetta just because a share of appl doesn't cost $650 anymore.
 
2013-01-29 10:19:42 PM  

dr-shotgun: Past performance is the greatest predictor of future performance.


This is not, nor has ever, been true of a stock performance.

Apple doesn't even have a 15 year history of great performance, just ten.  In 1998 Apple was a barely functioning company.

Also, you're mistaking "cloud" to mean services focused on consumers.  Amazon is very large in cloud services for enterprise, and Apple doesn't have any competing product in that space.
 
2013-01-29 10:21:45 PM  

rugman11: Mitch Taylor's Bro:
Does Amazon pay dividends?

Nope

"We have never declared or paid cash dividends on our common stock. We intend to retain all future earnings to finance future growth and, therefore, do not anticipate paying any cash dividends in the foreseeable future."

Yglesias is right in that Amazon is, at this point, being run essentially as a non-profit organization. What he ignores, as mentioned earlier, is that the only logical outcomes for this enterprise are 1) investors force them to turn profits before they obtain monopoly status and prices go up or 2) Amazon reaches monopoly status and prices go up. Low prices with no profits are unsustainable in the long-term.


Both are probably true, but the market can stay irrational longer than you can stay solvent.

At some point Amazon will have to start taking profits, but with the pace of technology, no one knows if that's a year or 100 years from now.

It's just as likely that something comes along and kills Amazon before it reaches monopoly status or investors demand profits.
 
2013-01-29 10:24:44 PM  

dr-shotgun: I grock that the price of a stock is really the NPV of the perception of future cash flows. The trouble is, Amazon keeps making bets based on the strength of their core business and doubling down on those bets every time Bezos sees a new market opportunity coming along. At this point, Amazon needs to make good on multiple large bets in order for this strategy to have paid off. If it doesn't work, the whole thing will be a tremendous fiasco.


That's a pretty damn good analysis. Sometimes the business tab has nuggets of awesome. This is one of those times.
 
2013-01-29 10:25:42 PM  

06wildcat: At some point Amazon will have to start taking profits, but with the pace of technology, no one knows if that's a year or 100 years from now.


And that's how bezos drives shareholders nuts. It's kind of hard to figure out his play and it may be that he's never going to do what they think. Dude wants to sell everything at 1% it seems. I'd be lying if I said I knew what the hell he was doing but I feel pretty sure he does. Frankly, it's fun to watch one of these guys constantly confound the experts and conventional wisdom.
 
2013-01-29 10:26:55 PM  

06wildcat: the market can stay irrational longer than you can stay solvent.


One of my all-time favorites.
 
2013-01-29 10:30:33 PM  

Lsherm: Also, you're mistaking "cloud" to mean services focused on consumers. Amazon is very large in cloud services for enterprise, and Apple doesn't have any competing product in that space.


In that regard I wouldn't doubt Apple's ability to weasel its way in. Make a function easy enough on a personal level that it easily translates to a professional use and you're golden. Just look at what it did to RiM and the Blackberry - IPhone made work e-mail easy. It was a game changer for corporations.

The idea that the "enterprise cloud" (hosting virtual servers and applications and the like) will be game changers is ok, but really isn't is just rehosting existing server-client architecture? Amazon isn't going to beat HP or IBM in that space. The big thing, from my perspective, is more about accessibility - imagine collaborating on a powerpoint deck on the fly with your team that automatically syncs to all of your phones, computers, and tablets both at home and in the office without you having to go out to find it - basically the exact same kinds of functionality you get today with the "Apple Cloud" and your MP3s. That kind of "instant sharing" will be the real power of the cloud and I don't think we've even started to see what the possibilities may be.
 
2013-01-29 10:42:59 PM  
Amazon is still refusing to disclose results of its Kindle unit. Something smells rotten.

If you take total product revenue and deduct product expenses and fulfillment, you show a loss of $650mm for the year (and thats before $2.4 billion in marketing expenses).

meanwhile, Amazon is boasting that its margin improvement came from cloud and web services. those areas are what is keeping amazon in the black (barely).
 
2013-01-29 10:46:06 PM  

Lsherm: This is not, nor has ever, been true of a stock performance.


Given that my primary thesis here is that the market is being totally irrational vis-a-vis the Amazon stock price, we are in agreement.

Lsherm: Apple doesn't even have a 15 year history of great performance, just ten.  In 1998 Apple was a barely functioning company.


Fair enough.

In those 10 years though, Apple moved from dominating one field to another.

Amazon is attempting to dominate a number of fields as well. The key difference is that Apple entered markets and was immediately profitable in those markets they entered. They didn't place a bet on phones and immediately move into tablets before sewing up the phone market; they entered the tablet space after a full 3 years of leading the mobile phone industry.

Another key difference is that each of Apple's business initiatives are deeply interconnected with what came before. A music player begat a music store which begat a video store which begat a pocket computer that could play music and videos which begat an app store which begat a tablet computer. Parallel to all that, they also have those 5 million AppleTVs all poised to hook into that App ecosystem at any moment. All of this built on top of a computer business that Apple transformed into the dominant premium player in the market (with only 4% of market share, Apple takes home something like 70% of all profits in the desktop/laptop markets).

Really, there is a top level elegance to the long term Apple strategy. And all of it makes boatloads of cash at healthy profit margins.

Amazon started with books and leveraged their brand and tremendous experience shipping crap to turn into the definitive mass market retailer. They are the absolute masters at moving atoms in the digital age. What exactly does that have to do with competing against Apple, Netflix, Spotify, Hulu and torrents for digital content? How are these two businesses interconnected?

The strongest argument one can make is that Amazon has 300 million active users with credit cards, but that is a pretty thin basis for a business. Even thinner - Amazon uses this content business as an excuse to basically give tablet computers away. Perhaps this would be a great strategy to lock in a dominant, money-making content delivery business... but Amazon loses money on the content delivery business. They are basically going through the tremendous effort to build tablets, all done on the back of another side of the business that is hemorrhaging cash.

Even if this whole strategy is successful, it doesn't look like there is a huge amount of money in the content delivery business.

Lsherm: Also, you're mistaking "cloud" to mean services focused on consumers.  Amazon is very large in cloud services for enterprise, and Apple doesn't have any competing product in that space.


Who said I was mistaking AWS for consumer cloud services?

AWS is even more disconnected from Amazon's core business than their other initiatives.

The core problem here is brand cheerleaders confusing the real purpose of a business, generating profit. Eyeballs? Users? Market share? All bullshiat indicators unless the revenue produced from those activities generates a profit. Amazon, for all the amazing things they have done, has never produced any meaningful profits given the huge footprint and 19 year history of the company.

"Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way."

See also: Android.
 
2013-01-29 10:53:04 PM  

dr-shotgun: Lsherm:


The core problem here is brand cheerleaders confusing the real purpose of a business, generating profit. Eyeballs? Users? Market share? All bullshiat indicators unless the revenue produced from those activities generates a profit. Amazon, for all the amazing things they have done, has never produced any meaningful profits given the huge footprint and 19 year history of the company...


actually, Amazon has been finding a way to make money off of those eyeballs by selling ads on its websites. $500 million in very high margin revenue through Q3 of this year (not sure about Q4)
 
2013-01-29 11:03:25 PM  

dumbobruni: actually, Amazon has been finding a way to make money off of those eyeballs by selling ads on its websites. $500 million in very high margin revenue through Q3 of this year (not sure about Q4)


Great!

And where did all that money go?

Ohhh... Bezos plowed it into one of his other money losing ventures.

Here is a fun question: Aside from the retail side of Amazon, could any of their other ventures exist as stand-alone businesses?

If you want a preview of where Amazon is going, look a few miles East to Microsoft. MSFT is a company that absolutely dominated the market for computer operating systems. They flipped that position into a clear compliment business in Office.

Aside from that though, Microsoft's strategy has been to use their massive pile of cash to throw shiat against the wall and see what sticks. With the exception of Xbox, every single one of these other ventures has been a drag on the bottom line. Many have been absolute failures (MSN. MSNBC. Zune. Kin. Surface. Bing. Windows Phone. Surface. Now even Windows 8 is getting it's ass kicked).
 
2013-01-29 11:39:11 PM  
Their LTM net income is negative, so at least Amazon no longer has to worry about that ridiculously high P/E ratio. After all, you can't divide by zero.
 
2013-01-29 11:55:35 PM  

NewportBarGuy: dr-shotgun: I grock that the price of a stock is really the NPV of the perception of future cash flows. The trouble is, Amazon keeps making bets based on the strength of their core business and doubling down on those bets every time Bezos sees a new market opportunity coming along. At this point, Amazon needs to make good on multiple large bets in order for this strategy to have paid off. If it doesn't work, the whole thing will be a tremendous fiasco.

That's a pretty damn good analysis. Sometimes the business tab has nuggets of awesome. This is one of those times.


Yes, thanks to all who took (and will take) the time to post thoughtful comments. I need to learn about this shiat and don't have the attention span or math skills to wade through investing books. I started with "Personal Finance for Dummies" (I shiat you not) and read articles when I can, but the market reactions to good and bad news baffle me. It seems like when a company announces bad news, their stock goes up and the opposite happens when they announce good news.

Two years ago, the pundits were all talking about how Apple is the darling of Wall Street when they were around $350/share. A few rogue pundits countered with "look at their fundamentals--they're still undervalued!" The "no debt" and "huge pile of cash" part appealed to me, and I've always liked their products, so I saved up some money I could afford to lose (a whopping $2k) and bought four shares when they were at $520. Around that time, the estimates I heard said Apple could reach $650-750. Saw it rise to the $700's and fall to where it is now and since nothing seems to have changed in the fundamentals, I bought 4 more shares at $460. I'm hoping that they'll continue their recent track record of changing or creating entire industries by doing things their way. If they get back to $600, I'll be very happy.

Obviously, I'm not investing so much as betting, but I still want to understand the game I'm betting on. So thanks again for helping me understand a little more of where and why I'm "investing."

/ I have the basics covered: rainy day savings to hold me over for a few months and my 401k is maxed out and in a fairly conservative asset allocation.
// I buy individual stocks with betting money, so if I lose some, it doesn't sting too much
 
2013-01-30 12:36:29 AM  

Shaggy_C: Lsherm: Also, you're mistaking "cloud" to mean services focused on consumers. Amazon is very large in cloud services for enterprise, and Apple doesn't have any competing product in that space.

In that regard I wouldn't doubt Apple's ability to weasel its way in. Make a function easy enough on a personal level that it easily translates to a professional use and you're golden. Just look at what it did to RiM and the Blackberry - IPhone made work e-mail easy. It was a game changer for corporations.

The idea that the "enterprise cloud" (hosting virtual servers and applications and the like) will be game changers is ok, but really isn't is just rehosting existing server-client architecture? Amazon isn't going to beat HP or IBM in that space. The big thing, from my perspective, is more about accessibility - imagine collaborating on a powerpoint deck on the fly with your team that automatically syncs to all of your phones, computers, and tablets both at home and in the office without you having to go out to find it - basically the exact same kinds of functionality you get today with the "Apple Cloud" and your MP3s. That kind of "instant sharing" will be the real power of the cloud and I don't think we've even started to see what the possibilities may be.


Wow, maybe I can return the favor and share some knowledge from my clients, who happen to be some of the leading players in the cloud software market.

The term "cloud" is kind of vague (so is "server" for that matter) and the context in which it's used it important. Cloud is an architecture based on virtual servers and appliances that can be deployed and redeployed based on workload. It can be private, public, or a combination of the two.

These days, business applications are so compute- and storage-intensive, their data centers are running out of room. So, in an enterprise context, a cloud architecture allows businesses to conserve space and power requirements in their data centers because instead of needing one physical server per application, which may not run at 80-99% of CPU capacity all of the time, you can deploy two or more virtual servers on one physical server and make sure that you're using as much of the CPU power you have on hand. This is a private cloud.

Amazon recognized the importance of having CPU power as a utility a long time ago. They spun off their expertise in running their own cloud infrastructure and opened up their data centers so you can rent CPU power and storage space from them. Look at Instagram. They never could have gotten to where they are without a company like Amazon providing the data center muscle behind their application. Ten years ago, they would've needed to raise enough venture capital to build their own data center. So, that's how Amazon makes money off of their public cloud and how we get pseudo-artsy pictures of what people had for lunch.

A hybrid cloud splits the difference. A company might need to retain full control its confidential customer data, so it would run its own cloud architecture in its private data center. But suppose it wanted to test a new application, or move applications that don't use sensitive info to a public cloud, or maybe a company grows so fast it needs more compute power and storage ASAP? That's where running a hybrid cloud makes sense. If your private cloud and the public cloud run the same cloud infrastructure applications, you can extend your applications to the public cloud and get as much computing power as you need (or as much as you can afford).

Granted, this is oversimplified; the reality is clouds are still in their early stages and nothing is as easy as I've made it sound. But those are the basic concepts.

The cloud you were originally talking about (people all sharing data and collaborating "in the cloud") is one application that could be run in a public, private or hybrid cloud. But it could also be run from one physical server in the wiring closet of a small business. Or, if you have something like a Pogoplug, the 2TB NAS sitting on your desk at home.

/ hope this is all accurate enough for discussion's sake and that it didn't bore you :-)
 
2013-01-30 01:35:57 AM  

JohnBigBootay: 06wildcat: At some point Amazon will have to start taking profits, but with the pace of technology, no one knows if that's a year or 100 years from now.

And that's how bezos drives shareholders nuts. It's kind of hard to figure out his play and it may be that he's never going to do what they think. Dude wants to sell everything at 1% it seems. I'd be lying if I said I knew what the hell he was doing but I feel pretty sure he does. Frankly, it's fun to watch one of these guys constantly confound the experts and conventional wisdom.


Having been distracted by other events today, I'm just going to point upthread to this post (and many others) and say "that."

Bezos is on record everywhere as having said "your margin is my opportunity," and although I'm not convinced he's right, I'm also not convinced he's wrong, so I hold neither AAPL nor AMZN. It's going to be fascinating to watch this play out, and I think it plays out in 10 years, not 100. Relevant to the thread would be this article on Amazon, Apple, and the beauty of low margins.

If you're looking for fun
You don't need a reason.
All you need is a mouse.
It's earnings season!
(Burma Shave and I owe Chuck Jones a beer.)
 
2013-01-30 05:26:51 AM  
Yeah, all that FAIL...

...of being up $28/share in the after-hours trading
 
2013-01-30 08:13:47 AM  
It's because they support gay marriage!
 
2013-01-30 08:15:22 AM  
Amazon needs to set up a separate portal for video, like eBay did for Motors. They also need to release an Android compatible video app, or unlock the Fire HD.
 
2013-01-30 08:30:05 AM  
Wait a second - that's supposed to be a smiley arrow? I thought it was a... well.... I mean, given what we ordered, I thought it was a... well, you know...
 
2013-01-30 11:22:09 AM  
Last October I won a Kindle Fire HD at a conference. These are problems I see with this device:

1) Forcing consumers to pay $15 to remove annoying advertisements shows contempt for the customer
2) The only way to read books that do not come from Amazon is to convert them to PDFs and use a PDF application. This was not the case on older Kindles
3) No built-in flash support.
4) No Firefox yet.

The new kindles are an annoying 'walled garden'. My cheap smartphone works better. I still use my kindle but I would not consider another amazon product.
 
2013-01-30 12:04:47 PM  

Zulthar: The new kindles are an annoying 'walled garden'.


Yup, great device (love the stereo speakers) but the processor are a little weak, and it makes an iPad look Open Source. Nexus 7 skimps a little on features (no sd slot, rear camera) but performance on Jelly Bean is pretty much IOS caliber and the processor is a beast.

I have all three in my house. The iPad Mini is great. It's a walled garden, but it's huge. The form factor is a little big...to be honest, I'd rather have full size than a Mini. The Nexus is mine, and my favorite of the three: you can do whatever you want with the thing.

The Kindle is great for one thing: watching Prime Videos. I bought it as a gift for my Mother in law and she just uses it to play games, which is fine because she's not the one to tweak an OS.
 
Displayed 50 of 60 comments


Oldest | « | 1 | 2 | » | Newest | Show all


View Voting Results: Smartest and Funniest

This thread is archived, and closed to new comments.

Continue Farking
Submit a Link »
On Twitter








In Other Media
  1. Links are submitted by members of the Fark community.

  2. When community members submit a link, they also write a custom headline for the story.

  3. Other Farkers comment on the links. This is the number of comments. Click here to read them.

  4. Click here to submit a link.

Report