Research Intensive Investing

Amazon.com: Why Now Might Be the Time to Short

Thank you for the comments. I think a lot of the things you mention are far enough out that I am not worried about them having a large financial impact in the near term, as discussed in my write-up. Despite what some people may be saying about Unbox, it hasn't generated any revenue to speak of, and unless you see a big surge of sales in Apple TV or something else that allows the computer to better connect with the TV, I am not worried about digital downloads anytime soon.

There is a difference between investing in a stock based on valuation and expected financial performance, and investing it in because you like the company and think they are doing some neat things. This is exactly the kind of thing that helped fuel the internet boom, and will continue to allow for profitable opportunities to short companies like AMZN that get ahead of themselves. Though this is not something I plan to be short for 10 years plus, I do believe its jumping 70% on not much meaningful news is not a sustainable outcome, and that the risk/reward of a correction in the near future is a profitable opportunity.