Robert McDonald's  Instablog

Robert McDonald
Send Message
FROM INSIDE SILICON VALLEY: Sorting the truth or likely truth from the noise is a key attribute of the successful investor. My commentary is a distillation of some of this effort relative to particular stocks and investment areas. My publishing at this point in time is limited to the blogsphere,... More
    Feb 2, 2013 11:29 AM | about stocks: AMZN

    Amazon stock pricing is a house of cards. A huge selloff can occur at any time catalyzed by a management misstep (witness Netflix last year), a significant miss on an earnings report or a more aggressive effort by Google in its entry into the shopping business. Find what you want with the Google Search and press the buy button now. No bricks, no mortar, no warehouse, no warehouse employees, no robots and with fast shipping direct from manufacturer to customer:

    Also remember that Amazon is now being forced to collect sales tax in many states, for example California. The 8% sales tax in California has significantly lowered their competitive advantage vs. stores like Target, Bed, Bath and Beyond, Costco, Fry's and Best Buy.

    Amazon pays no dividends and given its current PE, I don't think it can go much further as a growth stock. Why would anyone want to take the risk of owning it when the rewards are so limited, especially at this stock price. It the stock price continues to go up it only adds to the downside risk. Sounds like blind faith to me.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: AMZN
Back To Robert McDonald's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.