Amazon Is Selling Value Through Hope

NEW YORK (TheStreet) -- It's not even close: Amazon's (AMZN) Jeff Bezos is the greatest and most brilliant CEO of all time. If you measure shareholder value delivered relative to the amount of investment and company performance, Bezos beats Apple's (AAPL) Steve Jobs, Microsoft's (MSFT) Bill Gates and others with ease.

Brilliant is a strong and sometimes overused adjective, but how else can you describe a CEO who has once again delivered a loss, will likely deliver a loss in the best retail quarter of the year and Wall Street collectively says "Hey, we need to buy more of this  100 P/E stock because it offers such a solid risk to reward ratio"?

Bezos didn't create shareholder value by creating the most profitable retailer -- that position belongs to Wal-Mart (WMT). Amazon isn't even the largest online seller; Yahoo! (YHOO) may sell more online this year including its share of Alibaba.

Bezos is creating value through hope. It didn't start that way, albeit for those who understand how retail works it's obvious. Bezos understood how to exploit online affiliate marketing faster than anyone else. That single stroke of genius may be why so many others failed during the dot-com bust while Amazon prospered.

Prospered is a relative term, though. In Amazon's case, it means it was able to grow revenue, and that fueled hope. Amazon demonstrates perfectly what anyone in retail already knows: If you sell your products cheaper than anyone else, you will sell more. The problem, especially for Amazon investors, is that increases in revenue doesn't mean greater profits

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