From: Max More (max@maxmore.com)
Date: Wed Dec 29 1999 - 13:57:59 MST
At 01:54 PM 12/29/99 -0500, Andrew wrote:
>The failure in this approach is that he does not take market
>microstructure effects
>into account. It's simply not valid to take such an approach with these
>companies.
>For instance, Bezos has claimed AMZN's book business will be profitable in
>2q2000.
>Aside from his word, the average investor does not have much else to go
>on. Some
>investors have greater access to AMZN's financial data, however (call it
>illegal
>all you want, it's still true) and KNOW whether or not this is the case.
>The only
>way the average investor has of assessing the truth in the book business's
>ultimate
>profitability is to use the prior price history of the stock as a signalling
>mechanism.
I'm not sure about this, but I believe I read that Amazon will be breaking
out their accounts for the book division quite soon. If so, we'll be able
to see whether the book part of the business truly is profitable.
Personally, I would invest in the "arms suppliers" to the ecommerce
companies, and not in the e-tailers themselves.
Onward!
Max
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