Why did Amazon move up so much after earnings? The answer is simple: Expectations were so low with Amazon that when they beat estimates, there was bound to be a combination of late arrivals to the party and short covering. Often with earnings it's not a matter of how much a company makes, but how well they do compared to estimates and expectations.
There are other reasons to like Apple compared to Amazon like cash per share, growth rates and barriers to entry, but in the end what we really want as investors is to make a return over and above the Treasury bond rate in return for the risk of loss we take. If you want to be in technology, it's hard to make an argument in favor of buying Amazon with its dotcom bubble stock price. Do yourself a favor and don't get caught holding shares in Amazon if the bubble pops.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV