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  • seriously_skeptical_single_guy seriously_skeptical_single_guy Oct 31, 2008 3:54 PM Flag

    Peter Lynch and

    Peter Lynch was quoted as saying "Invest in what you know"

    AMZN has missed the promised delivery date by 4 - 7 days on every order that I have placed with them in the last year. Nothing weird, instock dvds, games and electronics.

    I am sure that my customer experience is not unique since I receive the same form letter, everytime

    In tough times, retailers with great customer service will thrive. Just a piece of information from 1 customer who is not going to deal with Amazon again.

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    • seriously_skeptical_single_guy seriously_skeptical_single_guy Nov 4, 2008 3:56 PM Flag

      Well I put my money where my mouth is and took a short position today in AMZN. I figure that they way these guys deal with me is probably a typical customer experience

      In dealing with these guys and trying to buy a dvd and a wii game, it is now Day 8, and they have missed 3 estimated shipping dates. They did call me yesterday telling me that I would have to cancel my order and then reenter it before it would get shipped. (I am thinking this is for internal tracking metrics rather than customer satisfaction)

      I have spoken to 3 live people and exchanged numerous emails. They still have not shipped the product but have ponied up free priority shipping and a credit to my account.

      I dont think these guys could organize and implement a bowel movement

    • >It's just not smart to pay a high price for slowing growth in a recessionary environment.

      Unless one is a long-term investor (already looking beyond the near-term) and sees faster growth in a recovery to more than off-set the temporary slower growth. If you wait for confirmation, i.e., many quarters of faster growth, most of the upside in share price will be gone. That's because equities tend to be forward-looking anticipating trends up to say a year in advance.

      In that light, recent lows may have been very cheap indeed with a PE well below the year ago PE. Prices may fluctuate in the interim, but once the market believes it has seen the bottom, begin a gradual rise toward $116 based on a 41 pre-bubble multiple plus a slower yet 25% consensus long-term annual growth rate. This rise may have already begun since $44.50 post-earnings. $44.50 or FCF and OI multiples of 20 and 23 may have already been pricing in lows of the real economy a year from now, with the bulk of the subsequent rise since (excluding a couple of dollars of short-squeeze), an attempt to price in the upside that should follow.

      Free Cashflow and Operating Income Ratios, Before & After Housing Bubble
      _____________ PPS ____ MC __ FCF _ FCF/MC __ OI _ OI/MC
      Nov 1, 2005 _ $40.37 _ 19518M _ 475M _____ 41 _ 430M ___ 45
      Oct 24, 2008 _ $44.50 _ 19002M _ 970M ____ 20 _ 840M ___ 23
      Nov 1, 2008 _ $57.24 __________________ 26 __________ 30

      The 41 and 45 ratios are probably a good proxy for what Amazon's share price should trade at in a more normal economy, which isn't today, but might be the ratios 12 or 14 months from now, implying a share price then of around $116. The precise timing will depend on the timing of market perceptions. And whether Obama, if he's elected, succeeds at killing growth incentives as many think he will in his quest for "equality" of results for everyone.

    • Nobody said to buy low p/e stocks. It's just not smart to pay a high price for slowing growth in a recessionary environment. Realize you are a big fan of AMZN, but realistically, the stock is overpriced given if the current expectations are met.

    • That's funny because I recently got my order delivered BEFORE I orderd it. Now thats fast! Love the servide!

    • I have actually had a lot of success with Amazon. I order a 52" Samsung LCD about 2 months ago and it was delivered in 3 days. Most items are delivered on-time and are about 10-15% cheaper than the next closest company.

      That being said, such low profit margins will lead to a sharp decline in value because this will not be a strong holiday season. Too many job losses and too many folks that have lost a large portion of their equity, if not all. Many folks have lost of 35% of their retirement and will not be spending. With these reasons in mind, I hold a short position. The P/E ratio is extremely high for this company and I think it will eventually fall below $40 before year's end.

    • Personally, I've never dealt with Amazon so I can't say anything bad about their service but it doesn't take a genius to see how the economy is going.

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