Quote:
Originally Posted by SteveEisenberg
Amazon stock has a current price to earnings ratio of 319.93. This compares to 15.47 for Microsoft and 15.99 for Apple. |
Here:
https://www.mobileread.com/forums/sho...d.php?t=190528
From the source, Jeff Bezos answers you:
Quote:
By the way, one thing I should tell you is that our approach is our approach, and we don’t even claim it’s the right approach. It’s not something that’s new, but it’s something we’ve done since the founding of the company. In my view, you set up the business in a way that is aligned with the customer, or you can set it up in odds with the customer. When you have the option, you should figure out a way to be in alignment. Sometimes that requires you to be more patient, so it’s part and parcel with long-term thinking.
But if you were a short-term-oriented share owner, you might say let’s get the money up front. That’s where I decline to say that approach is wrong. I won’t say that. But it’s not ours.
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Translation, Amazon makes its money in small chunks over a long period of time rather than big chunks up-front. It's long-tail thinking applied to their entire company.
So, the people that value amazon stock have to value them more as bonds or munis rather than short-term day-trader investments. And at a time of effective negative interest rates on bonds, Amazon's slow but steady approach obviously appeals to enough people to bid up their stock.
As Bezos says, its not a matter of a right way or a wrong way; just people liking *their* way. Whether it be consumers or investors. It is what it is and it is not going to change soon.