nostatistics

Amazon Shares Could Appreciate by 20%

I think that you are being very very very optimistic. There is no doubt that AMZN has a great brand and great service but let's look at some of the headwinds.
1. Credit card limits to be culled (already announced) in January
2. An increase of 7% in carrier shipping prices (announced) in January
2. A leveling off in MP3 player sales in core markets - less downloads
2. A rapidly maturing digital camera market
2. A rapidly maturing LCD TV market
5. Internet e-commerce model mature - amazon no longer ahead of competition
6. Increased off line sales competition through liquidation sales - only seeing the tip of the iceberg
7. Deflationary pressures postponing sales
6. Cloud computing is not the holy grail and amazon is struggling to explain benefits
9. Internet tax
8. New competition from social networks - I know amzn is working through linked-in
9. Over estimating Amazons sales based on increased visitor traffic - When I download a CD to the computer I check the song list - this is particularly important for Apple Users believe it or not as the folders don't carry
10. lack of demand for everything that they sell - all discretionary purchases.

Let's face it the only reason Amzn has held up is because it is extremely tightly held and traded stock - you have to wonder sometimes - it defies logic - e-commerce has never seen a recession so we do not know what will follow. I believe that amazon will see single digit growth at best in 2009. I think second quarter will be particularly interesting - I would like to see amzn back at 28 before buying. It is vastly overpriced at current levels and at an extremely risky valuation. Yes it could rise 20% due to short interest in the coming days but I would be shocked if it was above 40 come Feb 09.