Amazon’s policy has always been to lose money. Lots of money. In rare years, it breaks even. This is called gaining market share.
Investors in Amazon stock used to see their shares rise. It was a great investment 15 years ago. But not this year. The stock is down 22%.
Amazon’s customers save money. They order all kinds of products, although not Amazon’s Kindle Fire. So, the company has introduced new models of Kindle’s tablets. “If at first you don’t succeed, try, try again.” I buy from Amazon at least once a week. I save money at the expense of Amazon’s shareholders. The longer this goes on, the better . . . for me.
I do not discourage this policy. I encourage it.
Why Amazon’s investors think it is a good way to make money, I do not understand. But they don’t have to explain it to me, as long as they keep letting Bezos do it. They buy and hold, because they dream of profits someday. They dream of the day when the founder, Jeff Bezos, decides to reverse policy, hike company commissions, increase profit margins, and let investors bask in dividends. All he has to do then is keep the firm profitable in a way 100% different from the way he has kept it unprofitable for two decades: volume.
It’s like marrying a man with one personality type on the assumption that he will soon adopt a different personality type. Women do it all the time.
This is the new age of retailing: buy low, sell lower. As long as people keep buying new issues of Amazon’s stock, the company can keep expanding market share. It has money to burn.
Burn it on me! Please!