So what is the justification for this stock price?
There is no "investment" justification for this stock price... PERIOD. This stock's low "public" float and wall street favor contributes to it's unjustified valuation. NOTE: You don't get any negative stories on CNBC or other outlets about AMZN. This stock behaves like CRM as well. Even though they are tremndously over-valued, they just won't go down and stay down until some wall street entity with enough "juice" decides its time. Until then we can only be prepared to take advantage of the fall by watching and waiting for that moment.
Again, this is precisely why retail investors will continue pulling money from the market every week, despite why any CNBC pundit says about stocks being a better investment. WS shows on a consistent basis that it isn't willing to do the right thing. It would be one thing if QE raised all valuations, but that isn't what is happening. In fact, the disconnect increases every day and the spread in the risk adjusted return (especially including reinvested dividends) has gotten insane.
"It would be one thing if QE raised all valuations, but that isn't what is happening."
You can say that again! I have been watching with amazement, the past year in general and these last few days/weeks in particular, as Amazon shares and the shares of gold miners go in opposite directions. Gold miners were also "investing in the future" acquiring and building new mines as the price of their product went up for 12 years straight. They also saw expenses rise and profits suffer some as a result of all the spending. But unlike Amazon they have been roundly criticized by the investing community for spending instead of concentrating on near-term FCF and several CEOs have been fired as a result.
I realize these are very different industries but the principles of discounted cash flow valuation and risk/reward ratios are the same. If any industry should be the beneficiary of QE it should be the producers of precious metals, the anti-dollar money. And in fact many miners now trade at price/cash flow multiples of 5 - 7 while Amazon trades at many times that level.
Hanging in for now but have to admit this disconnect is trying my patience.
you're invested in bear market stocks while there's a raging bull market in others. It's a good chance if the leaders ever entered a bear market, that the dogs you are in become even more of a dog. Remember that.