Record numbers, better expected

In other corporate related news, Amazon.com Announces Third Quarter Sales up 23% to $25.4 Billion, which included in that is a rare profit, 17 whole cents per share for the quarter. Mr. Market had expected the fast growing company, that invests heavily in their business to not report such a profit, at best a really modest one. And whilst it is pretty insignificant in the short term (406 million Dollars operating income on revenues of 25.4 billion Dollars), it is a shift in the right direction. Comfortably above consensus and their own guidance.


Strange projects that earlier had attracted large sums of capital, have been shelved for more prudent capital allocations. Having said that however, CEO and founder Jeff Bezos is punting the Amazon Fire hard, suggesting that families pick up a 6 pack (at reduced prices) for the festive season. The Amazon Fire tablet is a hot seller, it is really cheap for the quality of screen that you get. Sales are expected to be between 33.5 to 36.75 billion Dollars, or be 14 to 25 percent higher than the comparable quarter that includes the all important festive season sales. i.e. the coming quarter. And operating income, the range is so incredibly wide, 80 million to 1.28 billion Dollars.


It is important to remember when analysing this business that Jeff Bezos is a dreamer who executes, someone who thinks really, really long term. There are many people who are not going to own the business on the basis that it is always unprofitable. Bezos is in the LOOOOONG business of building a global empire. And as such Amazon price action will be wild, the earnings will be volatile and Wall Street will continually be disappointed or overjoyed. Their time frames are 12 months, if you are owning this business (and you must), your time frame must be years, if not decades. The company is building the finest retail giant on the planet, the retailer of the future that delivers you products at the lowest possible price. That demands massive infrastructure investment, the balancing act of why it must be the trickiest job to be Amazon's CFO and have to sigh at entrepreneur and conquerer Jeff Bezos.


The stock is up nearly 10 percent pre market, and will, like Alphabet (Google) open at a record high. We continue to accumulate, I suggest that you do it in many different pieces, for all the above mentioned reasons. The future is here, two days after the day Doc and Marty arrived Wednesday, to find hover boards and augmented reality.