Excellent essay about Amazon by David Stockman:
Actually, however, the speculative run in Amazon's stock since early 2015 is far more ludicrous than even its current PE multiples suggest.
To wit, in early January 2015 its market cap weighed in at $135 billion compared to $535 billion today. So while it has reported no sustained improvement in its operating income trend during that 33 month interval, the company's $400 billion gain in market cap is notable for one especial reason.
Namely, there are only five other US based companies (Apple, Google, Microsoft, Facebook and Berkshire Hathaway) that even have a total market cap of more than $400 billion. Essentially, the momentum traders and robo-machines printed more AMZN market cap in less than three years than the total value of virtually every big cap company on the stock exchanges.
Thus, Amazon's $400 billion valuation eruption over this brief interval exceeds the total market cap of century-old storied names like Johnson & Johnson ($381 billion), JPMorgan Chase ($360 billion), ExxonMobil ($355 billion), Anheuser-Busch ($231 billion) and Proctor & Gamble ($222 billion), to name only a smattering.
Needless to say, Amazon's current $535 billion market cap is lodged in the financial thermosphere (highest earth atmosphere layer) owing purely to massive speculative momentum that always gets concentrated into a few names in the final blow-off phase of stock market bubbles.
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Stated differently, the Amazon bubble is not remotely akin to Professor Schumpeter's famous observation that capitalism involves a continuous process of "creative destruction".
Amazon is simply an economic destroyer. It extinguishes profits, accumulated investments, business enterprises and jobs in the markets it chooses to enter via the loss-making predatory pricing policies which its hideously inflated market cap enables.
You can read the rest @
http://davidstockmanscontracorner.com/a-monstrous-bubble-the-destroyer-called-amazon/
Amen.
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