H.J. Huneycutt

Even Amazon Bears Are Bullish

I don't know that 25% revenue growth, in absence of competition, would be impossible for AMZN over the next decade. In fact, the comparison to TJ Maxx hammers home the point --- the Internet retail market still has a lot of growth left in it.

The bigger issue to me is that I question whether AMZN can maintain their stranglehold on Internet retail. AMZN is raking in the dough like no other company in the market place right now (with the possible exception of AAPL). Other companies tend to notice things like this and make decisions to get a piece of the pie.

There are two big players here that could give AMZN more competition: Target (TGT) and Wal-Mart (WMT). Both sell items over the Internet, but have never dedicated much resources or effort to those endeavors. What if Target or Wal-Mart decides to hire a team to develop an online retail website that is comparable to Amazon? AMZN will probably be able to survive given the moat they've already built, but it definitely might sap into that "25% growth in revenues".

At $128, AMZN is a tempting short, because it looks like there's a very high chance it's overvalued. All the same, it's tough to bet against a company as well run as AMZN. But I definitely would not buy in at this price and if I held AMZN stock, I'd be a seller at this point.

Barron's S&P 500 Stock Screen

Interesting list.

'm not 100% sold on AMZN. It's a reasonable buy based on the belief that people will continue to move towards buying from internet retailers and AMZN is the Wal-Mart of the Internet retailers. All the same, there might be one little problem --- the states are desperate for money and many of them are concocting schemes to milk it out of Internet retailers since they most of them don't technically charge sales taxes directly to customers. If that happens, suddenly, Amazon's not as cheap to consumers.

It should still continue to experience growth. It's just difficult to say how the whole tax situation will play out.

2009 Depression Will Be Nothing Like 1929

Good article.

Another thing people continually fail to point out about the '29 Depression is that stocks were priced using near-absurdist valuation techniques. In essence, the '29 Depression was like combining this crash, with the Tech Crash earlier this decade, but then valuing *ALL* stocks on the same absurdist lines as the tech stocks. Stocks prices were certainly bloated in '07, but I don't think things got nearly absurd as in the '29 Crash (outside the Housing market and a few select industries).

Another thing to consider, the '29 Crash happened before the SEC Acts of 1933 and '34, which required publicly-traded companies to file financial statements with a statement of opinion from a public auditor available for public viewing. Many companies in 1929 were operating on the "Hey ... Trust Us!" system of financial reporting. Many hedge funds and private investment firms are still operating under that system (which is we end up with the Madoff scandal, amongst others), but publicly-traded companies are not.

I think by any reasonable measure, the market is cheap right now. But it will keep getting dragged down further so long as there aren't enough buyers. And there won't be enough buyers until fear and uncertainty are eliminated.