Today, the CEOs of [[AMZN]] and [[CSCO]] reassured the markets with some bull puckey about reaffirming guidance for 2008.
Seriously. Look at these charts. What did you expect them to say?
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“My company’s stock is in the crapper.”
“We are going to make 52 week lows.”
“Who buys books when they can’t afford toilet paper.”
“We just released a new product. Its like a book that needs batteries, and its 100x more expensive.”
“Routers? Route this, beeeyatch.”
John Chambers, CEO of [[CSCO]] released his little nugget about being “even more comfortable” with the long-term growth targets the company has projected, right at 3:00. At that point, his stock was cratering. His statement propped the Nasdaq up for the day.
[[AMZN]] is no different from any other retailer and will live or die by the consumer, regardless of the CEOs desire to keep his stock from erasing every penny of gains its made over the last year.This smacks of desperation, folks. But again, what did you expect them to say?
Hey, my company’s stock is in the crapper, too!
True Story.
In practice, book sales increase when the economy is down, they are a cheap form of entertainment compared to vacations or expensive dinners out. But (huge but) Amazon’s stock price performance is only somewhat related in a logical fashion to it’s performance as a company. Of course this is true of many other companies as well.
As a seller on Amazon, who competes with Amazon in selling products unless the book is out of print, I have a very high regard for Amazon’s abilities as an online retailer and for their payment system. I have a low regard for Amazon’s abilities to manage the tech side of their own site (they have tech problems almost daily, far more than Ebay) and I’m correspondingly skeptical of Amazon’s abilities to carry out a massive ‘cloud computing’ growth effort without encountering huge performance problems. However, the stock performance will probably be based on perception and what people want to believe about Amazon’s abilities, rather than reality.
BTW even if the Kindle only takes 10 percent of the market for a particular book title, that is huge. I have to look forward two plus years on bookselling trends to adequately plan for my business, and Kindle is already affecting the prices of physical books, and in a few years you can put a fork in a big piece of my business, it will be done, i.e. no longer worth the effort economically. The important thing about this Kindle stuff is that it represents a huge potential income stream for AMZN itself, whereas the existing used book market produces income mostly for the private bookseller like me and only tangentially for AMZN via commissions. This is game changing for AMZN but unfortunately the perception is that the Kindle is an uncool device and it will take time for that perception to change. A redesign wouldn’t hurt either.
Disclosure: no position in AMZN or EBAY, I’m no fool. 😀
Boca, I like the kindle. I will buy one when the price comes down. My comments were somewhat tongue in cheek. I just can’t expect that those CEOs had any choice about what to say. They had to say something bullish, period. I think its bullshit, but then again, I don’t have the responsbility of a billion dollar corp. riding on my back.
While I’m only one person, I have cut back on my book buying because I’m worried about several things economically that might affect my family.
I am a fairly huge fan of books and literature, having been an English major in a former life.
How is your business going to adapt?
By the way, still long sukpheid. Ouch.
Amazon’s technical problems drive me crazy. Especially when they do their lightning deals and Christmas promos, and their whole site just bogs down.
Also, I think they need to redesign the whole search process. The way they display search results is just so clunky and ’20th century’.
Yet…I still buy all my books from there. Save for the ones I get from Powell’s.
If the Kindle gets a good redesign, it could definitely be a market changer.
sukpheid LOL I’m still long also. My motto for CPHD is buy in the 20’s, sell in the 30’s and so far it’s been working as a trade.
English major? You probably know far more about great literature than I do, most of what I sell is non-fiction, and sometimes I go on a science fiction splurge, love my sci-fi.
I used to cope with market changes by developing little niche specialties in books, like foreign language books or graduate level mathematics and engineering. Right now though I plan to sell off almost all my book inventory gradually over the next two years, I have no plans beyond that. However, I have a serious book addiction so I’m not sure I’ll be able to stop completely. I also sell antiques and art glass, which are not selling well right now due to the economy, and really have no clue what I’ll be selling down the road. I’d love to be one of those full-time stock traders I’ve heard about haha.
Bezos is always bullish ’cause I think he’s a little bit nuts and can’t help himself. I don’t know whether to believe Chambers anymore.
DPeezy… thank you for saying that about Amazon technical problems, it drives me crazy as well. I stopped complaining about it because all I was doing was bitching. The search function often doesn’t work or gives crazy results, not as bad as a few years ago though.
I sold about ten books of books to Powell’s in the past few months for them to sell on their site. Their site is cool.
“Hey lady, thou dost protect a bit too much, no?” (modern paraphrased version)
When a short become this crowded a sharp reversal tends to makes a timely, predictable and often violent appearance.
Trade this market wisely, or find yourself railing disgustedly once again, against a “stupid market”.
Remember what happens when the negative sentiment hits the extremes in this current market? …… (“hey dude, everything was looking so good for all my shorts, but now I can’t seem to find my scrotum”)
http://tinyurl.com/yofjtv
Asshat Dip Buyer-
VIX is the best measure of sentiment I know of. Right now it is near neutral. If it spikes near previous highs, the DJI, COMP, and SPY will break support. If the VIX drops back to support, the indexes will again be at resistance. Get it?
The sentiment I see is surpisingly bullish considering the SPY came damn close to making a new low on a closing basis.
Your greatest and only hope is that the NFP report Friday is not bad. If the report is bad, hello 11K Dow and 2K Comp.
Oh, Asshat DB, because I probably don’t do it enough, let me ring my own bell.
On Feb 26, while you were off celebrating your new longs, I posted that the setup looked like a humongous bull trap. 2 days later, the Dow begins shaveing off 700 points.
Good times.
Woodshedder Says:
VIX is the best measure of sentiment I know of. Right now it is near neutral. If it spikes near previous highs, the DJI, COMP, and SPY will break support. If the VIX drops back to support, the indexes will again be at resistance. Get it?
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Yes, my dear Woodshedder, we are traveling in a seeming correlated range currently.
According the iBC prediction machine, much more accurate than you both (or even myself), breadth improved throughout all of February, despite shares trading in a range.
What this portends is unclear, because right now the machine says “sell.”
Is this fabled ‘prediction machine’ Gasparino-adjusted?
The Fly’s ‘Time Matscheen’ was defeated last week by said man…but hopefully he spent the 2 days of ‘meetings’ with the mad professor instead and thus now made it Gasparino-proof.
boca,
all of those comments were Peanut Gallery material. Give yourself some credit, you have good comments. think about posting.
If she starts posting such stuff in the PG, we will have to rename the ‘King to the PG’ to the more PC/general ‘Sovereign of the PG’!
I wouldn’t be surprised to see Chambers ousted.
CSCO hasn’t seen 50 in 7 years.