Trump rants won’t hit profits
Amazon’s share price has suffered lately as President Trump has had the company in his telescopic sights (not to mention the North Koreans, the Russians, the Syrians, the Chinese etc.) never a dull moment.
It’s a firestorm! What to do? Buy Amazon? Sell Amazon.
The shares are down significantly since Trump’s unwanted attention. Trump has accused Amazon of being a monopoly and of ripping off the Post Office. It can’t be comfortable to have arguably the most powerful leader in the free world gunning for you. But will this affect Amazon’s profits?
The short answer is: No. Not at all.
A little history. Amazon began in the garage of founder Jeff Bezo’s home in Washington State.
Originally the website sold only books. One of the very first books sold was titled: Training Goldfish using Dolphin Training Techniques. Funny.
Fast forward. Now Amazon delivers 1.6 million items every single day.
Last year Amazon spent 23 Billion Dollars on R & D – the most invested by any company ever!
The internet technology stocks now comprise just a few companies that really dominate the industry and its hard to choose between them.
But here is an epiphany!
Apple can tell you that you need to buy the latest iPhone and Google knows what you have been looking at. Facebook can study what you are thinking about buying but only Amazon knows what you have just bought.
The moment you order milk Amazon will send you advertisements about different cereals or as you buy an iPhone, Amazon can send you all the specials on cell phone accessories. Now that’s really powerful marketing!
Lack of understanding
When making technology stock allocation decisions take this factor into account.
President Trump’s interference with Amazon is totally inappropriate and with due respect shows a remarkably lack of understanding for a businessman.
Most people just don’t understand that no one can beat the free market.
I recommended Amazon shares last year in June when it was trading under $1 000. Now it is at $1 445 (it hit a high of $1 618 this year). That’s a +45% return in dollars in eight months!
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