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Open Your Mind: Amazon Is NOT Netflix

Quarter after quarter, I tell you what will happen with AMZN. And, quarter after quarter, it pretty much goes down something like this: Amazon reports whatever it reports -- it really doesn't matter -- the stock initially drops, bears think the world finally righted itself, but, lo and behold, AMZN finds support and moves higher. This next leg will take the stock towards and quite possibly past $300.

If you're a media member, stop writing completely asinine things such as the following lead to Tuesday's The New York Times earnings rehash: "Amazon sold many more things in the fourth quarter while barely bothering to eke out a profit" (emphasis added).

And, if you're an otherwise intelligent Tweeter (cuz I see Tweets from this guy @cordial all of the time and I know he's no dummy), stop, drop and roll before you Tweet things like this:

That sentiment came in second to the runaway victor Yeah but, you still can't justify a price-to-earnings ratio of 3,000.

There's this unfortunate misconception that complete fools run Guess what? These guys, led by Jeff Bezos, are quite smart. In fact, they have been running this business amazingly well -- using the very same type of philosophy in place today -- for more than a decade.

So, stop with the yeah, buts and, please, if you're writing stories about Amazon, have some respect for what Bezos and his crew have accomplished. Barely bothering! I won't even waste time on that.

The numbers do not matter at Amazon. Why is this so difficult to understand?

It stuns me that people rip Amazon for not providing enough information on its conference call. There might not be a more transparent company.

Sure they don't break their sales out in a way that would provide competitors with a treasure trove of useful data, but -- and pull out the magnifying glass to get a good read working here -- they tell you, in no uncertain terms, on countless occasions, that, in the near-term, the numbers do not matter.

They outline the philosophy that guides the company on every single call. Jeff Bezos has been telling it like it is -- straight up -- since 1999. In fact, here's what he told Bloomberg Businessweek roughly 14 years ago to the question -- Do you have a goal for when you can throttle back on expenses and become profitable?:
Our strategy is very, very clear: We're focused on long-term returns for investors. And to throttle back on investment now would be shortsighted. When we have less opportunity, that will probably happen. But as long as we have lots of opportunity, we're going to continue to invest commensurate with that opportunity in a very disciplined and methodical way, but in a long-term context. To do anything else, we believe, is irrational.
But we also don't claim that that's the right strategy. We just claim it's ours. And then people get to decide. But we're clear about it. And we do passionately believe it's the right strategy.
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