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You won't see a correction. What you're seeing is the world change before your eyes. Feel free to refer back to this comment in a year or two. E-commerce is s

You won't see a correction. What you're seeing is the world change before your eyes. Feel free to refer back to this comment in a year or two. E-commerce is sitting at 15-20% of all retail, it will almost certainly go to 50% this decade if not higher - it's inevitable. Value is more than revenue or profit and P/E ratios largely don't matter and haven't for a long time. Competitive positioning, long term leverage, and other things that you can't easily price matter just as much. This is about total and utter dominance in a sector - just look at the investments Shopify is making in delivering capital to small businesses or building out a fulfillment pipeline. Amazon's P/E ratio has been at or over 100 for the last 20 years. It was at 300 in 2012 (would you have bought then?). If you looked at that and that was the basis for not investing, you are using outdated views to invest. These companies are different and it's worth figuring out why.

stinkytaco 6y ago
I'm curious what you have figured out for "why?" When you say "value is more than revenue or profit" you are proposing an entirely post-capitalist way of thinking about the economy. I'm genuinely curious what you feel is different about Amazon, Shopify, etc. beyond a huge amount of debt, outside funding and interest rates that have made money cheap for more than a decade.
- xapata 6y ago
  I think you're misinterpreting "value is more than revenue or profit." I read it as value is more than historical revenue or profit. It seemed that was the intent from the rest of that comment.
  - stinkytaco 6y ago
    I understand that. But my question is "what's the endgame?" From your response here I assume you feel there will come a point where Amazon will be wildly profitable? When and why?
    - xapata 6y ago
      When regulators force it to stop expanding. Or when it becomes the monopoly in all industries.
subsubzero 6y ago
But this time its different! <- said before every large stock market crash in the modern era Alot of things to consider, 0% interest rates for over a year now, once the fed's spigot dries a bit expect to see huge drops in the market and especially alot of the speculative tech companies. Alot of working professionals have seen huge gains in money since covid, ie. no travel, no commutes, no buying lunch/breakfast at the office, no dinner out with collegues/family, no daycare(if they are parents). Add that up and its a gigantic monthly savings, alot is going towards home stuff/renovation, its also going into the stock market. People are forced online, with lockdowns and other restrictions people have literally been forced to find new ways to shop and entertain themselves, some may be more permanent than others. Once they are over expect large crowds in every possible way(theatres, malls, concerts etc) and drops across e-retailers.
- askafriend 6y ago
  > But this time its different! <- said before every large stock market crash in the modern era The world is not as simple as that one liner suggests. Everyone who sat out of the market since 2011 loudly shouting about a bubble (I know more than a few of these types)....have a ton of regret and what's more... they're paralyzed by loss aversion, fear, and cling to P/E as justification they're doing the right thing. If you can't draw out painfully obvious trends over the next decade and invest against those, I don't know what to tell you. Sure if I buy $AMZN at $3k today, it might drop to $2k next month. But I will bet a ton of money it will be far, far higher at the end of this decade. This is about network effects, the internet, scale, national security and the ability to achieve total dominance in a sector and leverage that into other sectors.
  - ghaff 6y ago
    Longer. This Richter Scales "Here comes another bubble" video was 2007. https://www.youtube.com/watch?v=I6IQ_FOCE6I&ab_channel=TheRichterScales https://www.youtube.com/watch?v=I6IQ_FOCE6I&ab_channel=TheRi... Obviously 2008 did see something of a drop in general so I guess they were right for the near term. But they were specifically ragging on companies that you'd have done very well with over the next decade+ even if you had bought in 2007.
stefan_ 6y ago
The grandparent wasn't talking about retail. > restaurants, travel, events, etc. You think those things are moving online? I don't see online vacations getting much traction.
- BoorishBears 6y ago
  Claiming the grandparent wasn't talking about retail is just wrong. > It's not just Etsy's stock that's up, but also the stock of Shopify, Amazon, Overstock, Walmart, Ebay, etc. And all the tech infra companies that support these ecommerce sites. You really think they're not talking retail? Not to mention the fact that no one claimed any of those things are moving online: > disposable income that used to go to restaurants, travel, events, etc. instead going to... [aforementioned companies
  - jameslk 6y ago
    Actually OP is right, I wasn't talking about retail per se. I was proposing the reason why ecommerce stocks are higher is due to changes in consumer discretionary spending (less spending on restaurants, travel, etc allowing more spending on online goods), but I acknowledge of course there are other pandemic-related changes in behavior that have increased the revenue of ecommerce, such as the shift away from retail. It remains to be seen whether this is a permanent change, but I'm betting it's not. All other discussions about whether ecommerce is taking away from retail are not entirely addressing the point I was trying to make.
    - fakedang 6y ago
      If evidence in China, a market which is more digitally integrated than the US, is anything to go, rebound shopping will make a huge dent on e-commerce.
chasebank 6y ago
Yes, P/E ratio doesn't mean much for a hyper-growth focused company but P/S ratio tells a different story. [1] Amazon's P/S ratio has bounced between ~1-4 since 06'. I'm sure before 06' too, but my reference stops at 06'. It's been fairly consistent relative to growth of the business. [2] SHOP P/S ratio is currently at ~53. [3] ZM P/S ratio has bounced between 40 and 150. Currently at 87. These meme stocks are highly speculative and we all know where speculative investing ends up. You will see a major correction. Feel free to refer back to this comment in a year or two. [1] https://www.macrotrends.net/stocks/charts/AMZN/amazon/price-sales https://www.macrotrends.net/stocks/charts/AMZN/amazon/price-... [2] https://www.macrotrends.net/stocks/charts/SHOP/shopify/price-sales https://www.macrotrends.net/stocks/charts/SHOP/shopify/price... [3] https://www.macrotrends.net/stocks/charts/ZM/zoom-video-communications/price-sales https://www.macrotrends.net/stocks/charts/ZM/zoom-video-comm...
- edoceo 6y ago
  !me Check these two comments on 2022-12-31
- BoorishBears 6y ago
  For the love of all that is holy I sure hope that you're not missing out on free money trying to time a correction, and are holding large hedges against a sudden crash you seem certain is eminent. The amount of money that's been made on bubbles in the last 30 years far exceeds what's been lost. It's strange to see that trying to call the top hasn't died as a hobby after how much sheer energy has been spent being wrong about it.
  - User23 6y ago
    Bearish bets are expensive even if you time them perfectly. Most of the time you just piss your money away on theta or borrowing costs even if the security in question doesn't even go up. I've only ever had one grand slam bearish bet and I placed it in March of this year. I think a lot of idiots get excited by that kind of success and chase recreating it to their ruin.
    - 6y ago
AussieWog93 6y ago
I run an eCommerce business in Australia, we've already seen a drop since COVID was (basically) eliminated and people started going out again. That said, I'd be surprised if there is not long term growth in the sector, especially as shipping becomes "solved" by drones etc.
- graeme 6y ago
  Are things still a fair bit higher than baseline though?
  - AussieWog93 6y ago
    It's hard to make accurate month-to-month comparisons in our segment (retro games), because all of our products are second-hand and therefore we'll have different inventory all the time. That said, our "regular" SKUs (cart only Super Mario 64, PS2 Consoles etc.) are generating maybe 20% more revenue compared to this time last year. Earlier in the year, this was as high as 2-3x normal revenue.
Rapzid 6y ago
There are winners and losers. People have a finite amount of disposable income and apparently most spend it all. You'll see the world change before your eyes again in 2021 when that disposable income starts shifting back towards other sectors of the service industry.. And when the rent comes due.
imtringued 6y ago
>These companies are different and it's worth figuring out why. If you figure out why then you would be engaging in value investing. >you are using outdated views to invest Business is much older than tech. It already had enough time for all the stupid ideas to die out. If those stupid ideas come back they will just die again.

stinkytaco 6y ago

I'm curious what you have figured out for "why?" When you say "value is more than revenue or profit" you are proposing an entirely post-capitalist way of thinking about the economy. I'm genuinely curious what you feel is different about Amazon, Shopify, etc. beyond a huge amount of debt, outside funding and interest rates that have made money cheap for more than a decade.

xapata 6y ago
I think you're misinterpreting "value is more than revenue or profit." I read it as value is more than historical revenue or profit. It seemed that was the intent from the rest of that comment.
- stinkytaco 6y ago
  I understand that. But my question is "what's the endgame?" From your response here I assume you feel there will come a point where Amazon will be wildly profitable? When and why?
  - xapata 6y ago
    When regulators force it to stop expanding. Or when it becomes the monopoly in all industries.

subsubzero 6y ago

But this time its different! <- said before every large stock market crash in the modern era Alot of things to consider, 0% interest rates for over a year now, once the fed's spigot dries a bit expect to see huge drops in the market and especially alot of the speculative tech companies. Alot of working professionals have seen huge gains in money since covid, ie. no travel, no commutes, no buying lunch/breakfast at the office, no dinner out with collegues/family, no daycare(if they are parents). Add that up and its a gigantic monthly savings, alot is going towards home stuff/renovation, its also going into the stock market. People are forced online, with lockdowns and other restrictions people have literally been forced to find new ways to shop and entertain themselves, some may be more permanent than others. Once they are over expect large crowds in every possible way(theatres, malls, concerts etc) and drops across e-retailers.

askafriend 6y ago
> But this time its different! <- said before every large stock market crash in the modern era The world is not as simple as that one liner suggests. Everyone who sat out of the market since 2011 loudly shouting about a bubble (I know more than a few of these types)....have a ton of regret and what's more... they're paralyzed by loss aversion, fear, and cling to P/E as justification they're doing the right thing. If you can't draw out painfully obvious trends over the next decade and invest against those, I don't know what to tell you. Sure if I buy $AMZN at $3k today, it might drop to $2k next month. But I will bet a ton of money it will be far, far higher at the end of this decade. This is about network effects, the internet, scale, national security and the ability to achieve total dominance in a sector and leverage that into other sectors.
- ghaff 6y ago
  Longer. This Richter Scales "Here comes another bubble" video was 2007. https://www.youtube.com/watch?v=I6IQ_FOCE6I&ab_channel=TheRichterScales https://www.youtube.com/watch?v=I6IQ_FOCE6I&ab_channel=TheRi... Obviously 2008 did see something of a drop in general so I guess they were right for the near term. But they were specifically ragging on companies that you'd have done very well with over the next decade+ even if you had bought in 2007.

stefan_ 6y ago

The grandparent wasn't talking about retail. > restaurants, travel, events, etc. You think those things are moving online? I don't see online vacations getting much traction.

BoorishBears 6y ago
Claiming the grandparent wasn't talking about retail is just wrong. > It's not just Etsy's stock that's up, but also the stock of Shopify, Amazon, Overstock, Walmart, Ebay, etc. And all the tech infra companies that support these ecommerce sites. You really think they're not talking retail? Not to mention the fact that no one claimed any of those things are moving online: > disposable income that used to go to restaurants, travel, events, etc. instead going to... [aforementioned companies
- jameslk 6y ago
  Actually OP is right, I wasn't talking about retail per se. I was proposing the reason why ecommerce stocks are higher is due to changes in consumer discretionary spending (less spending on restaurants, travel, etc allowing more spending on online goods), but I acknowledge of course there are other pandemic-related changes in behavior that have increased the revenue of ecommerce, such as the shift away from retail. It remains to be seen whether this is a permanent change, but I'm betting it's not. All other discussions about whether ecommerce is taking away from retail are not entirely addressing the point I was trying to make.
  - fakedang 6y ago
    If evidence in China, a market which is more digitally integrated than the US, is anything to go, rebound shopping will make a huge dent on e-commerce.

chasebank 6y ago

Yes, P/E ratio doesn't mean much for a hyper-growth focused company but P/S ratio tells a different story. [1] Amazon's P/S ratio has bounced between ~1-4 since 06'. I'm sure before 06' too, but my reference stops at 06'. It's been fairly consistent relative to growth of the business. [2] SHOP P/S ratio is currently at ~53. [3] ZM P/S ratio has bounced between 40 and 150. Currently at 87. These meme stocks are highly speculative and we all know where speculative investing ends up. You will see a major correction. Feel free to refer back to this comment in a year or two. [1] https://www.macrotrends.net/stocks/charts/AMZN/amazon/price-sales https://www.macrotrends.net/stocks/charts/AMZN/amazon/price-... [2] https://www.macrotrends.net/stocks/charts/SHOP/shopify/price-sales https://www.macrotrends.net/stocks/charts/SHOP/shopify/price... [3] https://www.macrotrends.net/stocks/charts/ZM/zoom-video-communications/price-sales https://www.macrotrends.net/stocks/charts/ZM/zoom-video-comm...

edoceo 6y ago
!me Check these two comments on 2022-12-31
BoorishBears 6y ago
For the love of all that is holy I sure hope that you're not missing out on free money trying to time a correction, and are holding large hedges against a sudden crash you seem certain is eminent. The amount of money that's been made on bubbles in the last 30 years far exceeds what's been lost. It's strange to see that trying to call the top hasn't died as a hobby after how much sheer energy has been spent being wrong about it.
- User23 6y ago
  Bearish bets are expensive even if you time them perfectly. Most of the time you just piss your money away on theta or borrowing costs even if the security in question doesn't even go up. I've only ever had one grand slam bearish bet and I placed it in March of this year. I think a lot of idiots get excited by that kind of success and chase recreating it to their ruin.
  - 6y ago

AussieWog93 6y ago

I run an eCommerce business in Australia, we've already seen a drop since COVID was (basically) eliminated and people started going out again. That said, I'd be surprised if there is not long term growth in the sector, especially as shipping becomes "solved" by drones etc.

graeme 6y ago
Are things still a fair bit higher than baseline though?
- AussieWog93 6y ago
  It's hard to make accurate month-to-month comparisons in our segment (retro games), because all of our products are second-hand and therefore we'll have different inventory all the time. That said, our "regular" SKUs (cart only Super Mario 64, PS2 Consoles etc.) are generating maybe 20% more revenue compared to this time last year. Earlier in the year, this was as high as 2-3x normal revenue.

Rapzid 6y ago

There are winners and losers. People have a finite amount of disposable income and apparently most spend it all. You'll see the world change before your eyes again in 2021 when that disposable income starts shifting back towards other sectors of the service industry.. And when the rent comes due.

imtringued 6y ago

>These companies are different and it's worth figuring out why. If you figure out why then you would be engaging in value investing. >you are using outdated views to invest Business is much older than tech. It already had enough time for all the stupid ideas to die out. If those stupid ideas come back they will just die again.