AMAZON FREIGHT TRAIN - ALL ABOARD?  Great (Gulp) Article on CNBC

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    Posted: 16 July 2012 10:07 PM

    Well written article on the debacle that AMZN’s stock price should become.  Can hardly wait.  Will the sales tax issue be the grease/banana peel that is needed?  Will be looking for some put action. The following paragraph hits the proverbial nail on the head…

    “The argument defending Amazon’s micro-margins typically sounds a lot like this, “Amazon is delaying the big pay day in order to increase its market share.” The argument simply doesn’t hold water. Those that have spent time in retail know that it’s easy to move a lot of volume when your prices are low. It’s a whole different ball game to make money in retail.”

    The article here…

    http://www.cnbc.com/id/48199967

         
  • Posted: 16 July 2012 11:00 PM #1

    Excellent article; thanks for posting.  Amazon has already picked the low fruit and with new markets and sales tax, I see potholes on its bumpy road ahead.  Never mind that the current P/E of AMZN is nose-bleed ridiculous.

    I’m sure the “chart looks good” w/regard to AMZN, but THAT AIN’T VALUATION FOLKS!  The sooner “investors” refocus on fundamentals, the better off (and richer) we’ll all be, provided AAPL is your core holding, not overpriced crap like AMZN, NFLX and FB.  It drives me bat*hit crazy.

    I tried to short AMZN last week and my order just missed filling.  I might have to try again.

         
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    Posted: 16 July 2012 11:41 PM #2

    I believe Amazon is currently ridiculously overvalued, but if they execute well and all the stars align for them, they could become THE major force in retailing. Their concept of same day delivery in major urban areas could make Amazon a major competitor of Walmart, Target, supermarkets, drug stores, and many other local retailers.  As their lines expand and they bring other merchants into their prime delivery service, I find myself ordering more and more stuff. Yesterday it was a blender gasket, a camera filter, and a toner cartridge; not long before that it was two radios.  All this is stuff I would have purchased locally a few years ago, and I can see myself routinely purchasing groceries from Amazon before long. I think we are finally seeing the dot-com promise being realized and that the world is changing in a seismic shift.

    In five years, I would expect that Amazon will be the biggest retailer in the world.  And it has no major direct competitors.

         
  • Posted: 17 July 2012 12:01 AM #3

    firestorm - 17 July 2012 02:41 AM

    In five years, I would expect that Amazon will be the biggest retailer in the world.  And it has no major direct competitors.

    A Walmart-Apple partnership would perhaps then be mutually beneficial?

         
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    Posted: 17 July 2012 12:08 AM #4

    Buying groceries from Amazon ?  what kind of “food” is this.

         
  • Posted: 17 July 2012 12:23 AM #5

    Tetrachloride - 17 July 2012 03:08 AM

    Buying groceries from Amazon ?  what kind of “food” is this.

    Dry and canned goods.  When they get same day delivery down it will expand to fresh / frozen foods.  If I can buy bulk grass fed beef from Amazon I’ll be one VER happy man.  I’m a huge Amazon fan.  Stock valuation be damned.  I don’t care what the PE is.  Amazon makes my life easier…...  Just like Apple grin

         
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    Posted: 17 July 2012 12:43 AM #6

    Tetrachloride - 17 July 2012 03:08 AM

    Buying groceries from Amazon ?  what kind of “food” is this.

    They are already test marketing same day delivery of fresh foods in Seattle through Amazon Fresh; go to http://fresh.amazon.com/ to see where and how it works, and what kinds of foods they offer.

         
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    Posted: 17 July 2012 03:45 AM #7

    I like Amazon, not necessarily the PE, but the company and the experience, not overly intrusive IMHO.

    With a household of teenagers & college kids, nary a day goes by that something isn’t being delivered, usually from Amazon.  We have an ongoing contest - “Let’s see if we can find something available online (or offline) that can’t be bought on Amazon…”  It is a challenge!

    Astronomic valuation, but not sure I would bet against them…

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    Posted: 17 July 2012 06:20 PM #8

    Jcaron - 17 July 2012 03:23 AM
    Tetrachloride - 17 July 2012 03:08 AM

    Buying groceries from Amazon ?  what kind of “food” is this.

    Dry and canned goods.  When they get same day delivery down it will expand to fresh / frozen foods.  If I can buy bulk grass fed beef from Amazon I’ll be one VER happy man.  I’m a huge Amazon fan.  Stock valuation be damned.  I don’t care what the PE is.  Amazon makes my life easier…...  Just like Apple grin

    That’s because you live in a cabin in the wilderness right?  :-D

    I buy a few things from Amazon but not that much. As I get older, I’m becoming less of a consumer.

         
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    Posted: 17 July 2012 08:08 PM #9

    Yeah, that Webvan.com worked so well for groceries. For investors, notsomuch. I still have one of their refrigerator magnets.

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    Posted: 18 July 2012 10:47 AM #10

    JDSoCal - 17 July 2012 11:08 PM

    Yeah, that Webvan.com worked so well for groceries. For investors, notsomuch. I still have one of their refrigerator magnets.

    I suspect that Amazon’s plan is to have their own fleet of delivery vehicles in major cities; same day delivery of all sorts of stuff would then be possible, and groceries would just be one more category. It is a more comprehensive strategy than Webvan, and far more likely to be successful. It would essentially replace unpleasant trips to Walmart (or the local equivalent of stores) for a lot of people.

    People enjoy shopping in person for clothes and Apple products and other cool, fun stuff; for all the other stuff, shopping is drudgery and is much more pleasant on line. At least that’s the way I’m trending, and I suspect a large share of the population feeds the same way. I think Amazon has the potential to be immensely successful in this venture.