My guts are telling me that a Amazon short against a basket of retail names will beat the market by a good sized spread.
Would you rather stick to an Amazon long here? Or even purchase Amazon, for that matter.
…OR…
Take this opportunity to buy retail stocks?
Keep in mind that most retail stocks have trended lower for at least 2-3 years. Amazon also happens to be the #1 most overowned stock in the market.
What say you?
If you enjoy the content at iBankCoin, please follow us on Twitter
I’d rather bet against $amzn here than the Kohler
being short /NQ, on my heels, I’d like to see AMZN obliterated
in 10 years, i’d rather own AMZN than KSS, JCP, M, or SHLD.
don’t forget that AMZN is so much more than a retail competitor.
the only thing i see value in for brick and mortar is the ability to return things quicker when i buy them online.
what does retail have to offer other than cutting costs by closing stores and liquidating?
The thing is, people saw that idea 3-5 years ago. It’s an over valued idea, IMO.
true! but who can say just why people were buying? i thought it was because of AWS. the younger folks in my generation use amazon for E-V-E-R-Y-T-H-I-N-G.
i’m 29. roommate is 24. we have alexa and it’s the greatest. we have a prime subscription and buy shit with reckless abandon. even if it’s the same price as in-store, we buy it on amazon because it’ll come to our doorstep in 2 days.
also, 3-5 years ago, people weren’t buying AMZN for video. it’s now a full-on NFLX competitor, for other reasons than just original content. consider this:
-i wanted to watch The Sandlot with my girlfriend the other night. NFLX didn’t have it. AMZN did, but for a $4 rental. i paid it. i do this frequently, about once a week. it’s actually really interesting and frustrating that NFLX doesn’t have a rent feature.
AMZN is so much, and it’s constantly innovating and growing. they’re the internet’s everything store. they’re just breaking into original content and movies and rentals. artificial intelligence! web services. not to mention logistics. was reading a piece about how they’re investing in the trucking industry.
i think they’ll be one of the first trillion-dollar companies in 10 years’ time. with a market cap under 400 billion, i dont think a double is too farfetched from here.
I’ll said this. Prime truly is the devil. You buy all sorts of useless shit because its so easy to do. And they are typically always lower priced than at the retail store. I threatened to cancel prime and my wife almost kicked me out the house.
I bet she did that for reasons other than canceling prime.
+1
The wife is fooling around with the UPS guy.
The fact that the younger generation is enamored with it is why the older generation is moving out of it. Hearing you say double is intriguing.
it’s not even that we’re enamored with it; it’s just that it’s part of normal everyday life. it’s not like Tumblr or TWTR or instagram obsession. it’s just “oh, i need XYZ, time to go to amazon.”
and again, the video aspect. starting to wonder if NFLX will begin offering one time rentals for a couple bucks too. would be really smart on their part.
I think you are overlooking the fact that smart money invested years ago because they saw it becoming part of normal everyday life. To say that you aren’t surprised that $AMZN could double from here is exactly what I was looking for when I wrote up this post.
I like how you brought up Amazon’s movie/show streaming selection. I’ve started using my prime membership to watch their shows and they actually have some good stuff (currently binging Goliath).
AMZN has been accomplishing what it set out to do, capture market share… what happens next when they own most of the retail market? Keep spreading to other industries? Eventually they have to start making money to justify these valuations, I’m just concerned on how they will accomplish that.
I would not buy AMZN here but shorting it doesn’t sound appealing either. There are safer bets out than messing around with retail IMO.
i hear that re: justifying valuations and not making money. but that’s been the case since they went public. i would imagine that at some point when they DO reach this inflection you speak of, they’d be spending less on R&D and expanding, and focusing on making cash.
I get it and agree with everything you said about AMZN and it’s influence on everday life. But doesn’t stretched valuation worry you? And it’s had an absurd run over the last 2-3 years, people have made their money on it already.
yes and no. i missed the run in the last 5 years. but like Jeff said himself, the market is flush with cash from the last 5 years. i’m of the mindset that the next AMZN is AMZN. hell, i felt like NFLX was overvalued and sold my $88s just over $100 before earnings, and now look at me. dick in hand…
@Ben – i appreciate your thoughtful comments on this. It’s a useful perspective, and over 10 years I agree with you 100%. But everything you mentioned is factored into AMZN’s current price. As is the fact that, like you, I bought most of my stuff on AMZN for Xmas. It’s very difficult to have a negative thought on AMZN. But it’s all priced in. That’s the beauty of an open and public capital market.
The useful thing is to imagine AMZN at $510. Feel your reaction to that. It’s the craziest fucking thought in the world. AMZN is the greatest force in American commerce. It’ll never go down that far. Right? Those are the types of moves that get fast.
I say this all as I’m short AMZN (obviously). Via puts, so I’ve limited my downside in case it goes to $1,000. I’m considering an add if it stalls in the $780-785 range.
thanks TJ. coming from mostly trading, i’ve got a long way to go in terms of actual investments. i know it could totally get down to $510 in no time…if it did, i’m sure a lot of us would be buying a whole bunch. i know i would. and it’s definitely got a history of big moves in either direction, especially after breaching all time highs. i’m curious/nervous what the next Q holds…
OA
I am eyeing brands like $LB $PVH $NKE. They are not going away , either way.
NKE been so beaten up recently. But all my friends and their kids are still all about it. And there’s this own new segment that calls themselves “sneakerheads” that buy shoes and don’t even wear them. It’s insane to me. I picked up NKE for my long term.
I’ve never actually gotten a lower price on Amazon for anything.
would love to get a few $AMZN puts for when it happens – it will be epic. Not sure what the signal will be but I’ll be waiting.
I’ve been patiently waiting to load up on AMZN puts, but they’re a bit too expensive right now and I’m not sure if it needs to fill the gap up at 815-820 before collapsing.
I’d prefer to sell an 800/805 CS as it approaches $800. As for retail names – LB HD TGT. As for retail short – maybe ROSS n TJX who are down less than $1. If KSS laid an egg these guys aren’t too far behind.
I don’t like AMZN stock – and I am a techie who has met with Andrew Jassy and with the various plebes on the AWS team in Herndon, VA. There is a lot of competition in the space and the players are cut throat. The data center build-outs are just crazy, from a scale, power, security (physical and logical/cyber) and there are going to be winners and losers here.
That said, i don’t like retail here either, but that is just me. I see OA’s thesis here and I get it, but I just don’t like the stocks, probably because I have lost every time I have tried them
Kamel- When you say crazy, do you mean they are amazingly excellent facilities? Or do you mean they have gone off the deep end and lost their way?
From what I understand – Amazon Web Services – its cloud business – what it has done and might do – is a main reason why it has doubled in the past few years. Point being – with just selling retail goods – probably would not be close to this high – probably more like upper-500’s. Given that the weekly and monthly chart looks like a slow rollover, it is over owned, everyone knows about it, and it is a “top web pick” by every newstand magazine me thinks if it is at this level before earnings – almost regardless of the report – it will be an excuse for funds to lock in gains.
$OA…no challenge to your thesis, curious as to your statement that AMZN is the most over owned stock in the market, is this just your general opinion or are you referencing data?
From my world, $FB is by far the most over owned stock institutionally.
The data I scored has $AMZN at numero uno.
Thanks, that being said we are buying retail here, allot. UAA, & NKE especially. Watching the scenario with CAB…if the Basspro merger gets scrapped it will be a buy
I bought $JWN and $COH today. Been long $UA and $LULU all year. Looking at $GII, $ANF and $GES for one more add. I also want a 6-8 month yolo in $SHLD if it trades under $10 again.
Does that mean you’re underwater on the UA?…pretty severely if you’ve been long for a year.
5% position, avg $44. Never put on the final installment yet. Underwater, yes.
http://etfdailynews.com/2016/12/30/ubs-amazon-alibaba-are-the-most-crowded-trades-of-the-year/
I agree that Amazon has done a great job of becoming part of everyday life. I agree that it’s easier to go there and get whatever you need…and they are expanding into food/grocery, and others. The moves into streaming, storage, etc. are very powerful and should be taken seriously.
Conversely, I think all of this is priced into the stock…it’s all about future expectations, has been for 10 years. At 178x earnings, it’s hard to imagine it runs a ton higher until they actually start making money…can’t just invest forever with no return…I don’t think.
Technically, this seems like an easy trade…see if it holds the 50, short once it’s below…see how it reacts at the 100/200. Assuming it fails, stay short to high 600’s, then look for move lower to 450/500.
Going long a basket of retail probably yields mixed results…could easily end up offsetting yourself within the basket. Straight AMZN short.
“Going long a basket of retail probably yields mixed results…could easily end up offsetting yourself within the basket.”
I don’t see this as being that hard. My family and I goes and sits out in front of Kohl’s once a month to point and laugh at those who shop there. We ask shoppers in Macy’s why they feel so bad about themselves that they have to shop there.
I feel I am severely under qualified, but could outperform in retail just based on common sensed observations.
It depends on when you intend to buy. Right now, none are a buy to me.
I just read a quote on kitco that said “solid gains in gold this week now suggest market bottom is in place”
28 posts in an hour. Last month you couldn’t get that in a day. shields up.
Perhaps though because he asked a question and people are timid to give their unasked opinions?
he asked about his biotech and no one gave a fuck though.
True. I think I got one response relative to the question asked.
I started a SHLD position today so I guess that’s my answer. Odds of tripling from here are probably better than odds of going to zero. AMZN is more of a high risk / low reward play.
To see where AMZN is going let’s look at WMT, which has the worlds largest warehouse situated on the gulf coast. A ship can pull up from China and offload directly into the warehouse. FedEx, UPS and a fleet of WMT trucks are right there along with a train yard ready to take the stuff all over the US, Canada and Mexico. The stuff can be shipped to a store or directly to the customer.
AMZN is now building warehouses, lockers and stores across America.
I don’t see TGT, SHLD, MACY, LOW, or HD surviving this onslaught.
The only problem I see right now is AMZN pays little, hires unmotivated drivers for $10/hr that drag boxes up to the door step while chatting on the phone with the magnetic Amazon sign crooked on the side of the van.
I would not short this company but I can’t go long until the market crashes.
what do you mean you can’t go long? You just told us that you got long the other day. lmao. ok.
Cut and paste where I said I was going long….
i already did a half hour ago in the newest thread, but i’ll post here too:
http://tinypic.com/view.php?pic=mkucur&s=9
TSLA. Setting up to burn more shorts or they are all burned up and it can’t get through 227?
If anything I would buy Amazon puts. I think about the cost and logistics aspect of delivery to the consumer. I think the drones are a distraction because I don’t see them solving delivery issues.
The ubiquity of AMZN is the real conundrum. I see AMZN 16-wheelers driving on the freeway several times a week now. Alexa is in several homes I visit, my family uses AMZN, watches Mozart in the Jungle, rents movies, buys Xmas gifts etc.
The tricky part of AMZN is the valuation of a media content producer/distributor, consumer staples/devices producer/distributor, shipping company, tech company, retail goods seller and distributor. How can one put a price on how AMZN has seeped into every facet of American life?
AMZN is so far ahead of every other company into monetizing IOT and creating a seamless environment for all technology. Beyond that, they have been smart in bringing in other businesses to utilize their technology (Dominos on Alexa for example). Why not, AMZN won’t be making pizzas for at least another 5 years 😉
GOOGL was far ahead but completely got lost in pet projects and still has a hard time integrating their services into a seamless platform and GUI. Integrating Nest into a home device took wayyy too long.
Apple just fizzled out, it had the American consumer in its hand and then stopped integrating their brand into the home or car for some reason. APPL is in no-man’s-land.
Point is, AMZN is so far ahead at integrating the disparate array of products they make/market/sell/distribute that until someone challenges them to an arms race, we live in an increasingly AMZN world.
Our US Mail system will eventually be privatized by AMZN, give it 10 years, 8 if Trump is still president in 2023
I bought SHLD at $9 so I guess I’m buying retail. I wouldn’t short AMZN, that stock has too many crazy moves that make no sense to me. I don’t shop there, just use it for comparisons and comments on products I’m interested in then shop somewhere else that doesn’t charge tax. Having a hard time getting behind a resurgence of retail story which is probably why I should buy it.