Quote Originally Posted by Milton Kuo View Post
It was pretty obvious that Amazon's stock price got way ahead of itself during the tech stock bubble. [Despite recognizing a stock market bubble during that time, however, I still managed to get massacred on various stocks although I did avoid Amazon stock. ] However, Bezos sure did use that overinflated stock money smartly. When I read about Amazon building those warehouses to make its distribution network more efficient, I was pretty certain that that was going to be a cornerstone to Amazon's success and a tremendous barrier to entry for competitors.

At a $100 billion market cap today with a frightfully high P/E ratio, I think Amazon stock is again ripe for a substantial correction. Take away all the central bank easy money programs and I can easily see Amazon crashing hard.



I think a lot of iTulipers gnashed/are gnashing their teeth over not aggressively buying stocks in early 2009. It's difficult to believe that a crash as deep and widespread as the 2008 crash, where every asset fell except U.S. dollars and Japanese yen, will occur again in our lifetimes. The last comparable crash in U.S. history was the 1929 crash. I think it's beyond even Bernanke's "talents" to trigger another 80-year event in less than 10 years.



I would be very surprised if it were through Facebook.



What I don't see right now is an anchor to the physical world that will serve as a high-cost barrier to entry for Facebook's potential competitors. Facebook is relying entirely on the network effects of its world's largest user base as a barrier to entry. The closest analog I see is eBay, where I don't believe there is a privacy issue.

For Facebook to grow into its market cap, it's going to have to sell a lot of advertising that leverages the tremendous amount of information they have on their users. Facebook will not only know what a user likes, it will also know what a user's friends like. To the best of my knowledge, no advertising platform has ever had that kind of information so readily available. Will this turn Facebook's users away from the platform to a competitor or away from social media altogether? One idea I've had that may one day be a serious competitor to Facebook is an idea involving private clouds that are controlled by individuals.
Personally, I like the idea of private clouds with maybe a public skeletal/central nervous system to keep it all together connected in a common format.

I'm confident Facebook will be able to monetize the rich data it's use voluntarily share......but I can't help but think if we will see an internet version of the video game crash of 1983. -

On the topic of Amazon....a couple anecdotes worth sharing....I was involved in the distribution buildout from just the Seattle Distribution Center through the first 2.5 million sq. ft.

There was SO MUCH MONEY WASTED it was insane.......but the old adage of "you can have it good, cheap, quick...pick any one" was very much true.

Also, Amazon's long-term debt(since retired) was denominated in Euros.......a deal done right about when the US Dollar peaked....it went backwards costing a bit of money as a recall.....but that was all happening around the time I departed.

I still think Amazon has a lot of potential......but agree completely.....current valuation is scary!

I'm quite interested to see how Amazon maneuvers thru a Peak Cheap Oil world.

There's still a lot of cubic air/void space being delivered all around the world.