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This is where an MBA helps, or a really good article like this one: https://commoncog.com/cash-flow-games/ https://commoncog.com/cash-flow-games/ TLDR: If you
by dzink 4y ago
This is where an MBA helps, or a really good article like this one: https://commoncog.com/cash-flow-games/ https://commoncog.com/cash-flow-games/
TLDR: If you have predictable money coming on because you are so necessary to society (like a utility), instead of paying profits to the government, you can take loans against your cash flow and grow by acquiring businesses with the extra cash. You will always seem unprofitable, and you get to benefit from loan interest deductions on your predictable cash, but in reality you grow bigger than ever, through acquisition. Another thing Amazon has going for it is the 30-60-90 terms it has with many suppliers and affiliates - they make the money now and pay them a month or three months from now. That makes them further bank in huge valuation compared to the rest of the sector. Cash flow is king.
That is why Leveraged Buyouts were a big thing for a while and why when interest rates go up, the math for many of these levered giants stops working or needs adjustment. Toys RUs are an example. It’s a very valid growth approach, and it works well if you can afford (and don’t overdo it).
- boppo1 4y agoDo you have an MBA? If not, where'd you learn to recognize stuff like this?
- finikytou 4y agoyou should go out and look at whole food shops, walk in the streets early at delivery time to see in the trucks what kind of package people are getting (PRIME is now a word of english vocabulary), what video people have on their door, how many people hire amazon, how they have airline, all it takes is noticing all those daily influence that amazon has on professional and individuals life. they are the biggest company that has ever been in the western world. by a huge margin. and big is scary to government. big is scary to people. better look big and broke than big and financially looking like you killing everyone else
- sokoloff 4y agoHow much of Amazon’s airlift is in-house vs Atlas, ATSG, and Kalitta? I mostly see and hear the latter three, but I admit to not knowing just how tightly controlled or owned they are vs just contracted lift.
- dzink 4y agoYes, I do, because as a software engineer my whole life I wanted to know how to actually capture the gains my code generates. Best way to recognize patterns and learn: read the annual statements of public companies in different industries in detail. You’ll notice quite interesting things - such as web hosts only growing 7% per year, or especially with earnings seasons moving markets now - seeing which companies are dependent on debt and worse, impacted by the higher interest rates, and which ones are growing like crazy despite that.