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I have started reading some of your posts and enjoy your thoughts and ideas. I was wondering if you have valuation thoughts on Amazon?

Sorry if this is the wrong place to post this question...there just seems to be a lot of OT threads on this board,


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Hi, David. I'm not mungo nor do I ever pretend to be him... even after staying at a Holiday Inn Express.... but here is a link to a number of his Amazon comments in this thread:

This is a nice quote from him in it:

Amazon is a perpetual low-margin no-ROE business. Always has been and I assume always will be.
Outside the US there is perhaps a negative moat, inside the US a marginal one at best.
I don't see one at all, but then I don't live in the US.
It's a business based on having the best price, with no barriers to entry
and perfect price comparison ability. The sales tax scam is going away.
The appearance of "brand loyalty" comes solely from their high sales
figures which they are purchasing with their low cost of capital, 1999 style.
There is an infinite demand for stuff sold at no profit, but why bother?
I would certainly short them, but it seems they have managed to find an extremely
large number of gullible shareholders who stick with them through thick and thin.
Well, through thin and thin.
Plus, it's already priced for 20 years of results better than they have
ever managed in their best quarter ever. I put it in the "too dumb" pile.


I especially appreciate that thread since I'm one of the very, very few naysayers regarding Amazon over at the Stock Advisor Amazon board. I'm not about to short it <LOL>, but I'm not interested in buying it... and if brought up for discussion I'll argue against including it in the Phoenix <Supernova> portfolio. The ongoing stock price rise just makes no sense to me and I never get any logical responses to my arguments against Amazon as an investment.

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Regarding the stock price making no sense: I recently came across a bullish case for Amazon by an investor who previously wrote positively on Markel. I don't really have much insight into Amazon other than as a very frequent and happy customer:
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Great excerpt/quote. I've been looking for a concise statement explaining why I've never bought into the model, and that touches on everything.

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This is a nice quote from him in it:...

Gosh, I was in a cranky mood that day, wasn't I?
Obviously I might be wrong, so folks should bear that in mind.

If you're going to pay a nose-bleed multiple, do it on a firm with a fabulous moat as displayed by a fabulous ROE without leverage.
Maybe Visa or Mastercard instead?

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