patrick.net

I don't see any big downturn coming, but don't have time to elaborate at the moment. Why do you see a downturn? Amazon has been around for years.

I see a downturn in Amazon itself. Their cloud infrastructure is aging and competitors have come up with less power-hungry solutions and are ready to undercut the price. Cloud is where Amazon's profit is, the rest is at a loss or at best neutral.

Amazon is getting faster with delivery... Products are always cheaper than places like CVS/Walgreens.

What value do companies like CVS/Walgreens/Rite Aid really provide when the vast majority of their goods outside of booze, tobacco, and prescription drugs are available for cheaper on places like Amazon?

931e says

Amazon is getting faster with delivery... Products are always cheaper than places like CVS/Walgreens.

What value do companies like CVS/Walgreens/Rite Aid really provide when the vast majority of their goods outside of booze, tobacco, and prescription drugs are available for cheaper on places like Amazon?

Actually Amazon will charge you more for some and less for other products, they will keep a profile of your and an algo determines when to jack up or reduce your prices (at least for Prime members, not sure if this has been expanded to any member). Many times you want the product now, such as replacing earphones that suddenly broke or a cell phone holder for workouts, or food/booze. For goods/brands that you cannot easily purchase nearby it is great but for anything else I don't see much added value. Also, people are becoming more and more sedentary and isolated due to the delivery economy. I see it mostly saturated and prices differences are not that drastic, plus dealing with the postal services and delivery companies is often a real pain. But yeah shorting retailers can be good if you pick the right one, however I think that Amazon will be doing equally bad if not worse in a downturn as they will lose steam with their sole profit machine, the cloud services.

mell says

Actually Amazon will charge you more for some and less for other products, they will keep a profile of your and an algo determines when to jack up or reduce your prices

Use an anonymizer to hide your IP address and don't log in. Look at the public prices.

It always seemed utterly insane to me that pretty much every business would outsource all its servers to AWS, trusting that one service would not be hacked or go down.

rando says

It always seemed utterly insane to me that pretty much every business would outsource all its servers to AWS, trusting that one service would not be hacked or go down.

Agreed. Also, these days when AWS goes down, half of the internet companies do as well. Unacceptable, but it's hip.

It seems commonplace now that people will use retail stores to browse for items only to compare the cost of them on Amazon and end buying wherever it's cheaper.

I guess Amazon really did help kill all the retail bookstores. People would go browse in the stores, and then buy off Amazon for less.

Maybe that will happen with other retail stores.

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch

rando says

I guess Amazon really did help kill all the retail bookstores. People would go browse in the stores, and then buy off Amazon for less.

Maybe that will happen with other retail stores.

It wont happen overnight but as online distributors of prescription drugs continue to grow, places like CVS operate as nothing more than glorified liquor stores since the majority of their inventory can be found on Amazon.

I think their downfall is inevitable and they are currently way overvalued.

931e says

I was wondering what your thoughts were in terms of profiting from the downturn of the stock market/economy that is looming.

The downturn has been looming for the last 8 years. Don't count on it anytime soon.

Strategist says

931e says

I was wondering what your thoughts were in terms of profiting from the downturn of the stock market/economy that is looming.

The downturn has been looming for the last 8 years. Don't count on it anytime soon.

How can it have been looming for 8 years when the bottom was 8 years ago?

Right now stocks like CVS are at double what their peaks were prior to the 2008 downturn.

931e says

Strategist says

931e says

I was wondering what your thoughts were in terms of profiting from the downturn of the stock market/economy that is looming.

The downturn has been looming for the last 8 years. Don't count on it anytime soon.

How can it have been looming for 8 years when the bottom was 8 years ago?

The sluggish economy is finally gaining confidence. The stocks are merely anticipating a full recovery. We could have a correction when the economy actually takes off.
Retail with it's present business model has no future. Technology is gaining pace, and it won't be long before Amazon brings the buying experience that retailers like Best Buy currently have.

CVS looks pretty solid to me, with a p/e of 16 and dividend of 2.5%.

rando says

CVS looks pretty solid to me, with a p/e of 16 and dividend of 2.5%.

The future could change alot...

http://www.multpl.com/shiller-pe/ ?

rando says

Why do you think Target stock dropped so much since Christmas @patrick?

Target doesn't seem down all that much, still within the range of noise. If you take the really long view, still looks pretty good.

rando says

Target doesn't seem down all that much, still within the range of noise. If you take the really long view, still looks pretty good.

It's all perspective I suppose. If you take the really long view on a high percentage of stocks they all look pretty good these days.

I guess there's only one way to find out who is wrong or right in the near term... I'll buy some short term and mid term put options for a number of retailers and see how it pans out.

931e says

the downturn of the stock market/economy that is looming

Hilary voter?