Amazon Hits $1 Trillion Market Value Milestone (reuters.com) 75
Amazon.com on Tuesday became the second U.S. company to reach $1 trillion in stock market value, just weeks after Apple hit the same milestone on Aug. 2. Shares in the world's largest online retailer last traded up 1.4 percent at $2,041.68. Its shares hit the $2050.2677 level to give its stock a value of $1 trillion. From a report: Amazon and Apple, which hit the trillion-dollar milestone on Aug. 2, symbolize the growing influence of tech companies on markets and the economy. The industry is amassing wealth and power, creating a new order in business where the most valuable resource is no longer oil, but data. Not far behind in market value are Google owner Alphabet Inc. and Microsoft Corp. , both approaching $900 billion, while Facebook -- which crossed $500 billion in July 2017, a day after Amazon -- has stalled at those levels amid a data-privacy scandal and growth concerns.
I see THREE SHELLS! (Score:3)
Monopoly is meaningless? (Score:5, Insightful)
No. I buy nothing from Amazon. Whether they are worth a trillion dollars or they go out of business tomorrow, it is meaningless to me.
When they drive the last of their competitors out of business, will it still be meaningless to you?
Re: Monopoly is meaningless? (Score:2, Insightful)
Perhaps, then, you don't mean nationalize? Breaking them up would leave room for competition. Nationalizing them would guarantee that no one could ever compete.
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True ... even with 4-5% of the entire retail market it's a tough sell they are a monopoly, they don't seem to be controlling the supply of retail goods at an inflated price. But they do sell alot of disposable crap (Amazon Basics) at inflated prices and drive over your lawn to deliver them (Amazon Delivery). Shame!
Re:Monopoly is meaningless? (Score:4, Informative)
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Or at least, isn't that where Amazon is deriving most of their profit?
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AWS is definitely the most profitable division, but I'm not sure it's the one with the highest earnings.
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I'm quite certain Amazon cares more about AWS than their retail services.
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I also do not buy anything from Amazon, but the startup I work at spends about $200 grand a month on AWS.
Amazon's consumer website is shit. AWS has value though.
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No. I buy nothing from Amazon. Whether they are worth a trillion dollars or they go out of business tomorrow, it is meaningless to me.
When they drive the last of their competitors out of business, will it still be meaningless to you?
Or more importantly, how much does the OP rely upon AWS (either through their employment or web apps on the internet such as Netflix)?
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Ok, even if you have a good reason or not, I don't see how your post is relevant.
Are you implying that somehow you are better person, because you didn't buy something from Amazon?
If so you should give your reasons to explain why, vs. that you just don't.
It is kinda stupid to make a statement where no one really knows what you mean.
It is kinda like in college when some students make a silent protest. With no signs or anything else. It is just a bunch of people sitting quietly in the hallway.
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I do find it funny how "Technological Vegans" love to troll the internet.
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Can we nationalize the oil companies first?
When a company is nationalized, it generally turns to shit. So nationalizing oil companies might be the push we need to get away from carbon.
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Enough said.
Captcha: preempt
Your Captcha, which was the best part of your post, should have said, "fuck that".
Monopolies are evil (Score:3, Insightful)
Amazon is working hard to be a monopoly.
Monopolies are inefficient (Score:4, Interesting)
If capitalism is so great, why does it allow monopolies to exist?
Capitalism doesn't really "allow" or "not allow" things. That would be a regulatory scheme.
Capitalism (or more specifically, free markets) is a system that is efficient on the micro-level (for a certain definition of "efficient".) If the system evolves into a monopoly, however, the free market assumptions no longer hold, and the system is no longer efficient.
It seems to me that monopolies are the result of executing your capitalistic business plan successfully. In the physics world, monopolies would represent a low entropy state.
I don't even know what that means. In general, monopolies are a result of entry barriers and economy of scale (which may often be the same: the entry barrier is often because of the economies of scale.)
Once a large corporation enter the scene, there is also an anticompetitive entry barrier: a larger corporation can simply underprice an upstart competitor, using the strategy that they can simply take a loss until their competition goes bankrupt, and once the competitors are all driven out of business, raise their prices to recoup their losses. Is this "executing a capitalistic business plan successfully"? Well, I suppose.
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Capitalism (or more specifically, free markets) is a system that is efficient on the micro-level (for a certain definition of "efficient".) If the system evolves into a monopoly, however, the free market assumptions no longer hold, and the system is no longer efficient.
I don't think it can even be considered "efficient" when all of its assumptions hold. For example, in an "efficient" market for widget X with 100 suppliers, there is still the waste of creating 100 manufacturing infrastructures for each of the different suppliers. If every supplier has perfect information, then the super-rational solution is to have the lowest cost supplier create all the widgets, sell them at the market price, then share the profits with all the other suppliers.
This is absurd of course.
Socialism, like Monopoly, is inefficient (Score:2)
Capitalism (or more specifically, free markets) is a system that is efficient on the micro-level (for a certain definition of "efficient".) If the system evolves into a monopoly, however, the free market assumptions no longer hold, and the system is no longer efficient.
I don't think it can even be considered "efficient" when all of its assumptions hold. For example, in an "efficient" market for widget X with 100 suppliers, there is still the waste of creating 100 manufacturing infrastructures for each of the different suppliers. If every supplier has perfect information, then the super-rational solution is to have the lowest cost supplier create all the widgets, sell them at the market price, then share the profits with all the other suppliers.
What I said was that the free market system was efficient on the micro level and qualified that with "(for a certain definition of "efficient")". The certain definition of efficient here is Pareto efficiency [economicshelp.org]. In your simplified case of perfect information, in a free market when there is a trade such that both partners would benefit, that trade will happen, leading to a Pareto efficiency. That is a micro level efficiency-- what you are talking about is a global efficiency-- each individual manufacturer is
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As far as Socialism goes, it does work in the short term, because everyone involved is ideologically motivated to make the new socialist state a success. This is why you see the USSR quickly catching up to the US after WWII, despite being a war-ravaged nation; or how China is still far ahead of India, despite having a pure Sociali
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"...monopolies are the result of executing your capitalistic business plan successfully." No it isn't. It is competing unfairly. Capitalism assumes freedom of entry and exit. A monopoly restricts entry.
Capitalism isn't a Grand Unified Theory of Economics as you would like to construct that straw man just so you can knock him down. The reason for regulations is precisely the recognition that it is not the GUT of E and that more is required to provide a level playing field.
The situation is similar to the Cons
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Because we live in the real world and not in an economical model of a perfect market economy.
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Monopolies are wrong, but not necessarily evil. I haven't heard of many stories where Amazon is actively trying to kill its competition, they seem to just try to focus on making their product better.
Amazon just seems to competing against multiple competitors just because they seem to play a long term game over they years while their competitors are trying to win for that quarter.
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The capitalism model only works with competition
What model? Capitalism only talks about the control and profits and how it relates to public or private ownership. Capitalism places no requirements on the outcome of the market. I will raise you something more insightful: Capitalism with competition is an unstable state, with any bump pure capitalism will always tend to a monopoly.
Amazon is working hard to be a monopoly.
So is my local corner shop. That's how capitalism works. The thing that sets Amazon apart is that they are *succeeding* in becoming a monopoly.
A tale of two P/Es.... (Score:5, Interesting)
I find it amusing that with both companies being at a one trillion market cap, AAPL has a P/E ratio of 20, while AMZN has nearly an order of magnitude higher P/E at 185.
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For us readers of Benjamin Graham, today's stock valuations are just nuts. It's like the late 90s again. Folks justify the prices by saying they're paying for growth however; growth never lasts forever - there are always limits.
Eventually, fundamentals win out in the end. And when they do, the people who ignored them for pie-in-the-sky predictions lose in the end. The years 1929, 1980, 1987, 1990-1991, 2000 and 2008 (and some others) illustrated that.
I'm starting to see the articles with the theme of "it'
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Well I am not hearing economy 2.2 patch level 18. Amazon and Apple actually made their money by selling stuff for a profit. And not on speculation of future greatness, sure they make some money from speculation, but it is shown by solid sales numbers, and not fancy powerpoint demos.
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Actually, while you're correct that Amazon certainly does sell real stuff with real value for a real profit, their valuation has largely been based on speculation of future greatness.
For years, they've had minimal profits because they've left money on the table in the interest of driving customer growth while spending what they did bring in on improvements to their infrastructure. Despite their minimal profits, people have kept investing in them on the continued promise that—at some point in the futur
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What's the use of a low P/E? So the dividends will have a good yield without hurting cashflow, right?
Well, what if dividends are taxed more than capital gains? What if the company can redirect that profit into capex so they grow faster than the market? In this case, investors like a company that can keep growing at maximum pace, so that when the saturation point comes (which may be a long time with Amazon - maybe they
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All of what you say is true but...
Can it really account for an order of magnitude difference?
Both Apple and Amazon have lots of room for growth. At some point something will replace the cell phone, and Apple has all of the components and developers in place to move on that.
I have shares in both companies. But Amazon's P/E seem unrealistically high to me even though I agree with what you say about the potential future market growth of Amazon.
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So just use Earnings / Price, instead.
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Amazon already sells most things (Score:2)
But most people already buy most things from Amazon, so where is the growth coming from? Amazon I would argue has some room for growth but it seems like it is near saturation in terms of product sales and is desperately seeking out new markets (hence the push for things like Prime Video). Several websites already have figured out ways to pull me away from Amazon for purchases, why will that not become increasingly common?
Apple meanwhile has more room for growth via several product lines that already exist a
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That is patently untrue.
Still, Amazon has too high of a P/E ratio for my tastes.
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Problem is, AAPL is dying! (Been dying for what, over 40 years now?). Of course, Amazon, having made very little profit, is going to take over the world. (If you look at their annual reports, making profit isn't actually a priority for Amazon - they intend to grow revenues even at the expense of profits.)
High share prices keep out small investors (Score:2)
This needed to be split a long while back. $2K per share keeps out a lot of small investors. It's hard to buy a 100 share block at this price.
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Then buy a single share. But still, I agree it would be better if the price was around, say, $40
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$2K per share keeps out a lot of small investors. It's hard to buy a 100 share block at this price.
I'm sure Amazon or the rest of the market is crying for the small investors.
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I think keeping out small investors is a feature and not a bug. They don't want their stock held by the kind of people who got burned on their house, then gold, then bitcoins.
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This needed to be split a long while back. $2K per share keeps out a lot of small investors. It's hard to buy a 100 share block at this price.
Your broker doesn't allow you to buy fractional shares?
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At that level of investing, you're much better off investing in mutual funds - partial ownership of a big collection of stocks. Especially index funds. The price to buy into a fund is typically much lower (with a floor of a few hundred dollars). And the fact that they bun
Coming soon.... (Score:1)
Amazon sucessfully tests its first Hydrogen Bomb and builds an ICBM to launch it at Apple.
the most valuable resource is data? (Score:2)
Data may in fact be more valuable than oil, but neither Apple nor Amazon demonstrate that idea. Apple claims it's not selling it's data at all (and it's investor reports seem to bear that out) and Amazon's growth is largely a matter of market position, not data.
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A hard habit to break, but you should (Score:2)
I am not surprised by their market share. It is so damn convenient to shop with them.
In the last 8 months, I have made a concerted effort to avoid buying anything physical from Amazon.
I do use Amazon to search for different products of interest and to get an idea of the price.
I then try to find it in a local store and if the price is reasonably close, I buy it local.
I had a look around last year and noticed that a lot of stores seem to close and suddenly realized that I am part of the problem. So, I buy loc
Just like the Roaring Twenties all over again... (Score:2)
Excellent (Score:1)