27 October 2017: The rise and rise of Amazon

Although Amazon’s profitability is below that of other platforms such as Apple and Google, investors keep rewarding the entrepreneurship that is being displayed by the company. The stock price of Amazon climbed well above $1000 after trading hours yesterday. The Amazon stock was introduced in the markets at 15 May 1997. The introduction price was $16 back then. A quick calculation tells us that Amazon’s stock price has multiplied by a factor exceeding 65. But there is more: the stock has undergone multiple stock splits during its history of 20 years. In June of 1998, Amazon announced a 2:1 split, followed by a 3:1 split in January of 1999 and a 2:1 split eight months later. As a result, the introduction price should be corrected for these splits and goes down to $1.33. The stock has effectively become 791 times more expensive than it was at its time of introduction.
You may wonder: how did I waste such a perfect opportunity? Let’s hop into our time machine and travel to 1994. We are back in the early days of the internet. The majority of the population has no clue what the Internet (in this part of history still written with a capital i) is about. Amazon founder Jeff Bezos has just put a website (a what?) on the Internet which he uses for selling books. (A screenshot of one of the first versions of the Amazon website can be seen below.) Selling books by means of a medium that only nerds use? Are you serious? In two years and a few months from now, Jeff Bezos will go to the NASDAQ, hold up his hand and say: “Give me 16 dollars and I’ll give you one share of Amazon.” Would you trust him (part of) your investment money?

 

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US stock markets ended mostly higher on Thursday. The majority of corporate results that were published yesterday came out better than expected. The hunger among investors was back after a day during which the S&P 500 and the Dow posted their biggest drops in more than seven weeks. The House of Representatives also said yes to a budget blueprint which enables the Senate to eventually pass a tax-reform package by a simple majority. The Dow gained 0.31% and the S&P 500 rose 0.13%. The NASDAQ was in the green for most of the day, but slipped below its close of the previous day during the last four minutes of trading: -0.11%. Volatility was down for the good part of the trading session, but turned north in the last part of the session. The VIX closed 0.62% higher. UVXY ETFs (-0.45%) and XIV ETNs (+0.32%) closed with small changes.
None of our models gave a trading signal at the end of yesterday’s session.

Model  Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil XIV 1 January 2016

14.14%

-71.68%

-18.07%

8%

Adventurous Anny XIV 6 March 2017

6.96%

6.96%

-1.41%

11%

Solid Suzy XIV 6 March 2017

56.99%

56.99%

7.32%

101%

Lazy Larry
XIV 6 March 2017

56.99%

56.99%

7.32%

101%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 


René’s Reflections @ Friday: Meanwhile, (not yet) in Japan

At the time of this writing, on this sunny late Friday afternoon in Breda, I fill my time mostly with preparing for my upcoming trip to Japan. I am see myself as an organized person, who doesn’t leave things up to chance, if possible. When I leave for a trip — be it a month or two days — I want to make sure I have prepped for every detail. No surprises.
During recent weeks, I have spread myself too thinly I guess, outlining ever more tasks that I wanted to get done, and that needed a long bout of concentration. Though all very rewarding and satisfying in the end, now the day of my departure is looming closer, I start feeling like I’m getting behind on schedule more rapidly than I feel comfortable with. There are so many things that I prefer not to forget, that a big part of the preparation process has now become keeping a packing list with those things.
Thinking back of my recent trips, I see my big blue Samsonite, densely packed, filled up to the bursting point, just below the 30 kilos allowed by the airline. And that same suitcase back home after the trip, with three quarters of its content untouched during the whole trip. Preparation is good, but you can overdo it for sure. What if I just throw some necessary basic items into my suitcase just before leaving? Or better: I leave the big blue one at home, and bring a smaller one instead? As long as I don’t forget my passport, wallet and travel papers, I should be good to go.
So I just forget about the packing list, and stop ‘preparing’. Feeling better already!