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Time to short Amazon?

Brian Micklethwait has long observed that a company building a large new vanity HQ is highly corelated with the long march into decline 😀

That said, they have the world’s governments slaughtering their competition, so maybe wait a few years to go short.

Stop press: Continental Telegraph seems to be making the same observation.

30 comments to Time to short Amazon?

  • llamas

    I wouldn’t short Amazon anytime soon.

    There’s a huge Amazon hub just down the street from my office, in Romulus, MI. And it’s a sight to see. The volume of product being moved through just that one hub every day would stagger the senses for a person seeing it for the first time. And they have hundreds of such hubs. Their service continues to improve, in ways that would have been unfathomable even just a year or two ago. Their defect rate takes six-sigma – once the lofty and aspirational goal of every manufacturing business in the nation – and crushes it to dust under the wheels of the Sprinter.

    If one could short just the AWS portion of their enterprise, that might make some sense. But the physical-product delivery system has many years, maybe many decades, of healthy, profitable growth ahead. The only real danger to the success of their enterprise, as always, is from the idiot meddling of ignorant politicians.

    llater,

    llamas

  • Freddo

    I wonder if they are going to mirror Microsoft, which has been marching into decline for at least 25 years and made an incredible amount of profit while doing that.

  • Stonyground

    Rather than having a flashy HQ building, maybe this type of thing might be a bit of a red flag:

    “Dave Ingram, its chief procurement officer, said Unilever had set a target of spending €2bn (£1.8bn) a year with companies owned and managed by women, under-represented minority ethnic groups, people with disabilities and the LGBTQI+ community by 2025.”

    Rather than basing buying decisions on quality price customer service reliability of supply?

  • llamas

    I’m reading reporting this morning that suggests Mr Bezos was actually shown the door by his board because of his decision-making in recent weeks, to deploy Amazon’s resources to advance his political opinions, rather than to advance the interests of the shareholders. If true (first reports, all we know right now, etc, etc) then that indicates to me that the board has the right ideas. Buy AMZN.

    llater,

    llamas

  • Llamas, I don’t think anyone is seriously intending to short Amazon

  • Flubber

    If one could short just the AWS portion of their enterprise, that might make some sense.

    What sense would that be? AWS dominates its market.

  • William H. Stoddard

    C. Northcote Parkinson made a similar observation in one of his collections of humorous essays.

  • Stonyground

    Amazon’s advertising is now all about how much they are doing to tackle climate change. Climate change caused last year’s wildfires apparently.

  • CaptDMO

    Because nothing says Conspicuous Consumption better than wasting vertical space on the footprint in a dense metropolis.
    How DO I neutralize that ridiculous “avatar” graphic ?

  • Paul Marks

    Why should the People’s Republic of China continue to make Amazon rich?

    Amazon does not really make anything – it just takes goods, mostly Chinese made, and sells them on (the people who buy them mainly do so with BORROWED MONEY), why should not Chinese people sell their own goods?

    Where is it written that Amazon has a Divine Right to be the middle man?

    The United States, under the Biden-Harris regime, is increasingly a vassal state of the People’s Republic of China – which has four times the population of the United States and is ruled by much stronger willed people.

    If the rulers of China decided tomorrow decided to hand over the business that Amazon now manages to a Chinese company, would Biden-Harris object?

    Perhaps the Communist Party of the People’s Republic of China will continue to be kind to its faithful servant “Amazon” (and the other “running dogs” of American Big Business) or perhaps the “Winds of Heaven” will change direction. As America collapses into massive inflation and debt, so Chinese companies will need new customers anyway – unless Americans sell themselves as slaves (literal slaves), as their “Dollars” will be worth less and less.

    I suspect that Mr Bezos has got out at the right time – China bares him no ill will, and neither do Biden-Harris (after all his despicable “Washington Post” has long been a servant of the forces of evil) – so he will be allowed to enjoy his great wealth.

    Mr Bezos has betrayed his own country and the West generally – but he is no worse than most of Big Business, basically they have all betrayed the West by, for example, pushing the “Woke” (Frankfurt Marxist Sect) forces that are undermining the CULTURE (the society) of the West.

    Nor is China even guilty of destroying America. With its insane Federal Reserve and Credit Bubble monetary and financial system, and its ever growing “Entitlement” Welfare State AMERICA HAS DESTROYED ITSELF.

  • Paul Marks

    Llamas – Mr Bezos KNOWS that the ideas pushed by his Washington Post are insane. He is not a stupid man – he knows that ever more taxes, government spending and regulations can only end in disaster, and he knows that the CULTURAL policies that are pushed by the education system and the media can only end in societal breakdown (after all the Frankfurt Sect “Woke” cultural stuff is DESIGNED to under the West – that is what these doctrines are for).

    Mr Bezos goes along with all this evil to protect HIMSELF – and the Board of Amazon will do the same.

    The Board of almost every Corporation in the United States does the same thing – they are all a waste of skin, but if any of them tried to be a man they would be turned on and destroyed by the others on the board (Cancel Culture).

    You also waxed lyrical about one of their distribution centres – what we call “sheds” in the United Kingdom, vast places that take a lot of stuff in and push a lot of stuff out, and make essentially NOTHING. The irony of writing that from Michigan, once famous for its productive industry, is great.

    You can not base the economy of a nation of over 300 million people on the modern version of a Sears Roebuck catalogue – which, in the end, is what Amazon is.

    The Credit Bubble monetary and financial system is sucking in imports – that is not an economy. And the education system and mainstream media mean that most people have few real skills (technical or cultural skills), and little accurate information of the world.

    By they way – to anyone who says “all this is even more true of the United Kingdom”.

    Do you not think I know that?

  • Valerie

    As Amazon has just been caught stealing it’s driver’s tips, I suspect there will be a push to unionize Amazon’s workers in the near future. It couldn’t happen to a nicer group of people.

  • Where is it written that Amazon has a Divine Right to be the middle man?

    It’s not about Divine Right, it is about intellectual & physical infrastructure. Amazon is the most astonishing logistics organisation that has ever existed.

  • bobby b

    I needed a small, very uncommon piece of electrical equipment to help regulate between solar electricity production and generator use.

    It’s not expensive. It’s not commonly used. It’s hard to find, and I needed it quickly. Couldn’t find it locally at all, the maker sells only to distributors, distributors don’t stock it . . .

    Amazon had it. They shipped it to an Amazon Locker near me – a small facility (of which they have thousands scattered across the country) which functions as a home address away from home.

    I had it in my hands two days later.

    While I was at it – making the short drive to the Locker – I also ordered a bunch of of other items that had been on my “need” list, as well as a bunch of groceries. Shipping is free, after all.

    Amazon doesn’t “make” anything? THAT’S what Amazon “makes.”

    And the fact that they “make” it so well is why they’re so ungodly rich and powerful.

    Sometimes a cigar is just a cigar, even when it’s “a true double helix in shape and structure.”

  • llamas

    @ Paul Marks, who wrote

    “You also waxed lyrical about one of their distribution centres – what we call “sheds” in the United Kingdom, vast places that take a lot of stuff in and push a lot of stuff out, and make essentially NOTHING. The irony of writing that from Michigan, once famous for its productive industry, is great.”

    Amazon’s value-add – what they ‘make’ – is the stunning availability and lightning fast delivery, together with the accessibility to an essentially-limitless scope of products – as bobby b. touches upon. Who says anyone has to ‘make’ anything to add value? The ‘making’ is just the starting point, there’s no value if what you ‘make’ can’t get to market.

    “You can not base the economy of a nation of over 300 million people on the modern version of a Sears Roebuck catalogue – which, in the end, is what Amazon is.”

    No, of course you can’t – that would be excessively-stupid, which is why I never said it. But – again – you can’t base that economy on a system that does nothing but produce, with no means of getting products to market. The comparison with the original Sears & Roebuck catalog is an apt one – that created a whole new means of supplying a myriad of new manufactures to an eager market, by figuring out how to exploit the new channel of RFD.

    llater,

    llamas

  • NickM

    I have to agree that Amazon is just brilliant at logistics.

    And logistics is everything.

    “The line between disorder and order lies in logistics…”
    – Sun Tzu

    I ordered this PC on a Thursday evening. It is an ASUS from the RoC. It was here with me on Sunday morning.

    That is why logistics matters.

  • Flubber

    (after all the Frankfurt Sect “Woke” cultural stuff is DESIGNED to under the West – that is what these doctrines are for).

    The Frankfurt stuff went into overdrive in 2012, after the occupy protests. And the radical left ate it up with a spoon, and went bonzo anti-white, with the full support of the corporations.

    The establishment certainly didn’t want people paying any attention to the ruinous practices of Wall Street, especially after 2008.

  • GamecockJerry

    AMZN may be brilliant at logistics but they don’t make much from it. In the last quarter, AWS was 10% of sales but 52% of profits. They ‘only’ made $3.27 billion on $112 Billion in ‘Logistics’ sales. AWS holds them up, but MSFT and GOOGL are coming after it. It will go down long term.

  • Eric

    It’s not about Divine Right, it is about intellectual & physical infrastructure. Amazon is the most astonishing logistics organisation that has ever existed.

    Yes. Logistics is far more difficult to get right than you’d think at first glance, and the numbers are mind boggling. I worked for a company making warehouse management software in the mid 1990s. Just by optimizing internal warehouse operations a few percentage points we were able to save our largest customers millions of dollars a day. And that’s not even addressing the procurement and shipping end of things.

    A company the size of Amazon that gets this right is going to dominate the competition.

  • Zerren Yeoville

    Want something? Try your local High Street. Drive into town, find somewhere to park, pay what seems a ridiculous price to rent a small rectangular plot of land for merely an hour to leave your car on, feed coins into meters which happily accept overpayment but don’t give change, noting at the same time that the newer machines require your car-registration number to be keyed in and printed on the ticket so that you can’t pass any unused time onto anyone else even though it’s already been paid for, trail dispiritedly round the shops in the full expectation of either not being able to find what you want or finding that they don’t have it in that size or that colour, realise suddenly that you have four minutes left on the car-park ticket but the car-park is an eight-minute walk away…

    Or log onto Amazon, find the exact thing you want, ‘add to basket’ and check out. Delivery tomorrow if you pay or are a Prime subscriber, or free delivery if you can wait a couple of days. Delivered to your home. Don’t want it delivered to your home because the dog chews up the post or you don’t want it sitting on the doorstep until you get home in the evening? Fine, choose the ‘Local Collect’ option to have it routed to your local Post Office for you to pick up. Don’t want to queue at the Post Office? Okay, then have it delivered to the Amazon Locker in a local supermarket’s entrance lobby and pick it up when you do the grocery shop…

    It’s not exactly a mystery why Amazon is thriving. They don’t ‘make’ anything? They make time – your time. Time that would otherwise have been expended on a probably-futile search locally, now freed up for you to use as you wish:

    “… every hour I save is an hour added to my life. It used to take me five hours to fill that tank. It now takes three. The two I saved are mine – as pricelessly mine as if I moved my grave two further hours away for every five I’ve got. It’s two hours released from one task, to be invested in another — two more hours in which to work, to grow, to move forward.” – Ellis Wyatt to Dagny Taggart, in Atlas Shrugged.

  • Sam Duncan

    I ordered this PC on a Thursday evening. It is an ASUS from the RoC. It was here with me on Sunday morning.

    I remember ordering computer bits back in the ’90s, in the days of “Please allow 28 days for delivery”, and usually even that was optimistic. I once waited six weeks for an Amiga expansion card… from Yorkshire.

    On the other hand, Amazon’s estimated delivery dates are usually wildly pessimistic. I’ve given up paying any more than the basic rate; there’s just no point unless I’m in a desperate hurry.

  • bobby b

    GamecockJerry
    February 4, 2021 at 10:10 pm

    “AMZN may be brilliant at logistics but they don’t make much from it.”

    In fairness, they can’t raise their prices as they’d like until all of the sticks-n-bricks stores are out of business. So, this is all just an investment period.

  • APL

    I contribute to Amazon’s bottom line. Each time they offer me a free trial of Prime, and they’ve done it often enough, I accept, all my purchases are now free of postal charge and next day delivery, then at the end of the month, just cancel. Then wait for the next free trial offer.

    Nor would I short Amazon, until the US government is no longer subsidising the operation for all the data it collects.

  • Stonyground

    I was reading a book once and an old book was referenced and I was curious about it. I searched the Amazon website and found it. When it came it was new old stock, the price had been cut off the dust jacket but there was a list of other books by the publisher with prices in shillings and pence. I wonder if I could have ordered it from a regular book shop and how long it would have taken to get. Back in the days when Amazon did mostly books I ordered a book on Sunday evening and it came on Monday morning. I was left wondering how that was even possible.

  • Johnathan Pearce

    Zerren nails it: “It’s not exactly a mystery why Amazon is thriving. They don’t ‘make’ anything? They make time – your time. Time that would otherwise have been expended on a probably-futile search locally, now freed up for you to use as you wish.”

    Paul Marks – who frankly should no better than denounce Amazon as not “making anything”, overlooks this crucial point. The search cost we incur in looking for things the old-fashioned way bite into time, and as the Austrian school of economics and others note, time is money. It is the one thing we cannot invent. If we no longer have to spend hours and resources seeking a book or buying a piece of gym equipment, we can do something else. We unlock capital for other purposes, and everyone gets richer as a result. Yes, old-style shops lose out, but others gain. There is also the “long tail” effect: it allows niche publishers, for example, to thrive. Self-publishing has got a lot easier. Etc.

    You can not base the economy of a nation of over 300 million people on the modern version of a Sears Roebuck catalogue. No-one said that that is what can happen. And by the way, the Sears Roebuck business, fusing telegraphs and the railroad, dramatically improved living standards of, say, farmers in the Midwest who had the ability to buy consumer goods that would otherwise have been impossible to obtain easily and efficiently. That made it much more attractive for people to go out into the farmlands in the first place, and hence capture the benefits of modern agriculture. Consider it as a sort of force multiplier.

    To disdain the benefits of super-efficient retail and organisational changes is the sort of error one associates with the crude materialism of Karl Marx, not Paul Marks. Go and stand in the naughty corner.

  • llamas

    Ordered from Amazon today:

    – 4x oil filters
    – 500 ft 550 paracord
    – 5x MTM-100 ammunition boxes
    – Fiskars 28″ hookaroon – they lie, you can break one of these if you try
    – 10A 240V two-pole circuit breaker, DIN-rail mount
    – 100x 1″ stainless-steel jump rings
    – 50x 3-pole Wago connectors

    Total time to order – maybe 10 minutes.

    Total time it would take me to get all these items from B&M stores – maybe 3 hours, and 2 gallons of gas.

    That’s what Amazon is making.

    I just found out that a book I wrote almost 30 years ago, that was boutique-published to a tiny market and never sold but a few hundred copies – is available on Amazon.

    Amazon is the most amazing distribution system ever devised by the mind of man. Bar none.

    llater,

    llamas

  • Speaking of Amazon and time-saving, I once read a book, Where Were You Last Pluterday? It was written by Paul van Herck, way back in 1973. If I wanted a copy I could have it from Amazon in a day or two, with prices ranging from $12.50 up to $969, depending.

    I don’t need a copy — it was a decent read-once. But time-saving was the central premise of the book. If you could save enough time, by driving faster cars, riding in faster planes, and having servants do your work, you got an extra day in your week: Pluterday. You had to be rich to save that much time, of course, though I don’t remember the people who got that day were called Plutercrats. I’m not sure whether that’s a good idea or a missed chance.

    We all know time is money, and money can be converted back to time. This book just carries it further.

  • Dalben

    Because Amazon is much better at being the middleman than it’s comptetiors. Though competitors are also improving a lot, so that may not remain the case.

    Anyway, China could certainly cut off direct sales to Amazon, but they wouldn’t have a replacement that everyone would use. More likely Walmart.com would take over. They could forbid direct sales through any non-Chinese company, but they would still be selling their goods to US middlemne who would be selling on Amazon and walmart.

    Plus, it’s not as if *everything* for sale comes from China or that supply chains can’t change if China imposes extra costs.

    I mean obviously the current ruler is fibr with sacrificing wealth and trade in favor of other ambitions, but cratering their economy to do the kind of measures necessary to drive Amazon and it’s other non-Chinese compeitors out of the selling cheap Chinese goods business would hurt him far more than it helped.

    And it might not even drive them out of business. Moving supply chains on that scale isn’t easy, but if China starts making those kind of moves it would be a really strong motivation. If they decide to destroy Amazon, there’s no reason to think your smaller that imports from them will be safe.

    I mean, theoretically they could create an opening for Chinese companies in that market space, and then just replace all the non-Chinese sellers. But somehow I don’t think the companies benefiting from such extreme government interference will be all that competitive.

  • Paul Marks

    I see people.

    So Amazon is “amazing” because it delivers stuff to you – as Sears Roebuck used to do (or an smaller scale).

    And you will continue to pay for everything to be made in China, with money the government (or the Credit Bubble banks) will create from NOTHING – and all will be fine.

    Well if you all really believe that, then you deserve what is coming.

  • Johnathan Pearce

    That’s very petulant, Paul. Sears was also a hugely important company for the reasons given by people in this thread.

    Yes we know the central bank issue, Paul, but that’s not really relevant. Even with hard money, the way Bezos has transformed retail and hence saved people a huge amount of time is worthy of applause. So he owns the Washington Post. So what?

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