Namaste!
Amazon has corrected enough to look attractive to value investors. VI basically mean they will look for:
1. Low P/E ratio,
2. An long term up-trending stock (Amazon is that),
3. Fear in the markets, Etc.
Investors like Warren Buffet doesn't buy when the market is at all time high and people think it will keep going up in a straight line.
He and other value investors wait for an opportunity, when there is fear and it results in considerable fall in the stock prices. It's when they come in.
For Amazon, I can say with 100% confidence, value investors must be jumping in. This opportunity (because of correction) is rare and happens in 4-5 years approx. They are smart people and following them is a smarter decision. Amazon is definitely a buy, at current prices or at break of 118.
The most important rule in Investing is, never ever sell at a loss. There are only two possibilities in my opinion, either the company goes bankrupt, or you make money.
Disclaimer: Investment carries an element of financial risk. Investment does not guarantee a fixed return due to volatile nature of markets. Please do your due-diligence before investing. You are solely responsible for your decisions.
Amazon has corrected enough to look attractive to value investors. VI basically mean they will look for:
1. Low P/E ratio,
2. An long term up-trending stock (Amazon is that),
3. Fear in the markets, Etc.
Investors like Warren Buffet doesn't buy when the market is at all time high and people think it will keep going up in a straight line.
He and other value investors wait for an opportunity, when there is fear and it results in considerable fall in the stock prices. It's when they come in.
For Amazon, I can say with 100% confidence, value investors must be jumping in. This opportunity (because of correction) is rare and happens in 4-5 years approx. They are smart people and following them is a smarter decision. Amazon is definitely a buy, at current prices or at break of 118.
The most important rule in Investing is, never ever sell at a loss. There are only two possibilities in my opinion, either the company goes bankrupt, or you make money.
Disclaimer: Investment carries an element of financial risk. Investment does not guarantee a fixed return due to volatile nature of markets. Please do your due-diligence before investing. You are solely responsible for your decisions.
Comment:
Amazon is moving in the direction I expected.
Comment:
Amazon was a wrong investment pick so it could be sold at $120 or more (not at a loss).
Comment:
Why I changed my thoughts on investing in Amazon? A: Amazon has created a new category of stocks, namely "growth stocks". These companies doesn't focus on profit (like "value stocks" do). But, rely on "cheap credit" to finance their growth. These companies focus on increasing sales numbers (revenue, market share, etc), hoping someday they will convert sales into profits. Valuing these companies is tough because they are valued at "estimates" and prediction, as compared to value stocks where they are valued at "actual annual profits". Valuation is also difficult because these companies have a high P/E, lots of debt. But, you should not forget that these companies have a success ratio of less than 20%. In an era of cheap credit, every unqualified company survive, but only the "fittest" survive till the end. Example of growth stocks are Tesla, Netflix, Uber, Zomato, Etc.
Trade closed manually:
I didn't had any positions, but exit price was triggered on 26 May 2023.
Comment:
I expect anyone who is reading my writings to know that there is nothing "certain" in the markets. Neither the %gain on stock nor "out-performance" or "under-performance". There is a risk and opportunity cost involved in both, buying and selling. Selling at any price can often result in "opportunity loss" when the stock moves higher and higher. Human psychology is a culprit here. For e.g. I post any stock which seems undervalued or overvalued to me on tradingview. When anyone makes money on that, they wont appreciate me "a single word". But when they lose or it results in opportunity loss, they are bound to blame me. I don't criticize any person, because I know their psychology has defeated them. At last, there is nothing like "easy money" in the markets. The survival of the fittest holds absolutely true here.
Comment:
I have to accept my one mistake, so that I can try not to commit it next time. I told to buy at USD 118 and sell at USD 120. I am talking about India not USA because USA doesn't pay much interest on savings deposits. In India anyone could've earned around 4.5% on savings ac or 9% on fixed deposits at best annually, "without taking the risk". But in Amazon's stock case, you took the risk but "jumped out" without taking the reward. Which is a wrong decision financially, because greater risk should be compensated by greater reward. So, the best price to actually sell was 18% above the buy price (double the alternative avenue). It was USD 138.24.