Happy to be an Amazon shareholder

[Tapiture]

For those who don’t know, yesterday Amazon stock went up near 14% after a huge earnings beat. Unlike Apple, Amazon’s earnings have been consistently higher, despite the razor thin margins on their Echo products and Prime memberships. They were propelled to record earnings by huge purchases on Prime Day and increased purchases overall. This is why I invested in Amazon last May. Bezos’ genius is selling these products, which would seem to make little money, but actually make a huge amount of money for Amazon. Echo has introduced a whole new way of buying products, simply vocally asking. An increase of Amazon purchases is no-doubt a result of the introduction of Alexa. Alexa even charges different prices than the Amazon marketplace on a computer. Amazon gets right what Apple often gets wrong - growth is much more important than profits. Amazon envisions their devices not purely as high-margin money makers, but as a channel for a broader purchases.

 

[iMi]

I am glad you're happy with the investments you made, but to suggest Amazon's growth is more impressive than Apples makes little sense. Apple's market cap is about $840 billion while Amazon is at $530 billion. Apple is a much larger company and has a vastly different target audience. I cannot see how anyone could fault Apple for growth.

Amazon is basically the new Sears. They are a large retailer. Apple is strictly a technology company that produces branded products in a relatively narrowly defined market. They compete on some level, but fundamentally they are very different companies. Both very successful, no doubt.

But to say Amazon gets right what Apple often gets wrong makes even less sense. How many Fire Phones are being sold today? Zero. It was one of the biggest flaps in the technology world. What is market share of the iPad vs the Kindle Fire? Abysmal. Amazon is the "everything" store. Literally. They sell web services, consumer goods, the are a publisher and they sell technology and more. They compete with Walmart, Microsoft, Apple and just about everyone else. I don't think that's a great long-term strategy. I prefer the "do few things but do them well" approach of Apple.

Amazon has created a model that turned retail on its head. One might argue they had unfair advantage over brick and mortar stores by avoiding the collection of taxes and by getting investments at a level that outcompeted traditional retailers. Plus they treat workers terribly and vendors even worse. They are not bound by pension obligations, they get around laws that govern benefits. In terms of retail, they had more advantages. Apple on the other hand had to fight for survival, reinventing itself and competing on level plain field to come out on top. So, I personally think Apple is the more successful and more focus company here.

 

[senseless]

I’m surprised at the size of the incentives cities are offering them to open there. The smaller retailers need the break, but Amazon?

 

[Tapiture]

I’m surprised at the size of the incentives cities are offering them to open there. The smaller retailers need the break, but Amazon?

Yeah I know. It’s a bit ridiculous. I live near Harrisburg which made its own offer but I don’t think they’re giving them special treatment in terms of taxes or benefits.