Paper Chase: Amazon Fire
The Fed has stated they are not concerned with inflation in spite of an increase in prices. In their recent announcement, they revealed they would continue to reduce bond purchases by 10 billion dollars per month, and interest rates will remain low until 2015.
Dubai has overtaken London’s Heathrow as the world’s busiest airport with 67 million travelers passing through last year. Dubai is within 8 hours flying distance of 2/3 of the world’s population.
The Bulls Are Running
The bull market will continue because there is no place else to go. That is, there is nowhere else in the world you can get the returns that there are in the U.S. stock market and it’s becoming a real problem. With the fed slashing predictions on growth rates for the year while at the same time dialing back their agenda of bond buying, mixed messages are being sent. The question is how we can cut the umbilical cord from the fed’s safety net (raising rates) which should happen within the next 18 months.
Mixed Messages
There are mixed messages with inflation particularly when looking at the producer price index (ppi) as prices like coffee are way down. The Fed has a delicate balancing act as it can overreact the market one way or another no matter what is said. As of now, the markets react when they allude to or talk about raising rates and will certainly react when they do have to take action on raising rates.
The Only Thing We Have To Fear Is Fear Itself
Market volatility is cited as a reason people are staying close to the vest as far as the market is concerned. Unfortunately for them, the biggest risk right now is to not be invested in the market.
When Will The Sky Fall?
We all know something is going to happen to slowdown this runaway market, but the question is when? The Paper Chase is about long-term investing as we look 20,30 or even 50 years to pass the gains on to our family and children. Looking at blips (which the recession of 2008 is over a multiple decade timeframe) as opportunity is especially hard to do when you are in the middle of it; however, if we had the advantage of hindsight in 2008 and took advantage like Carl Icahn and Warren Buffett, well……
What I’m Doing
I’m invested in the market, but have cash on the side to take advantage of dips because you know they are going to happen. Again, look for sectors where there is long-term growth. We already talked about how baby boomers are aging and retiring so healthcare is obvious. It is my belief it will be a hot sector for many years to come. I can also see the argument for energy as well from a global perspective.
Geopolitics
Iraq is playing out in oil prices but not in stock market. This expansion will lead to increased prices in summer time when people travel more. Oil, gas, and jet fuel have been rising before this latest crisis; however, interest rate risk has led to gold rising so what do we really know?
Amazon Fire
The Amazon Fire has a 4.7 inch screen and will be available in 32GB and 64GB for $199 and $299 with new AT&T contracts. They will ship on July 25.
A Phone?
Conventional wisdom would say they built a piece of hardware to get you to buy stuff on Amazon and the phone certainly has features aimed at that. This is not a cheap phone though. Amazon has put years of engineering effort into it, and are serious about the phone in and of itself. They want you to shop on it, but there is a possibility they could become a big smart phone maker.
Low End v. High End
If the goal is strictly to get more people to shop in their stores, they should have gone low-end and may have lost money on it as has happened before with their hardware. This is a clue Amazon really believes in the phone.
Again, making it easy to buy stuff off Amazon is part of it, but there also may be an opportunity 7 years after the iPhone dropping, where there is a different way of navigating a phone. Featuring access to a catalog and the new prime program may give Amazon access to what is now essentially a duopoly with iPhone and Android.
People love to speculate; however, when the product is different from what they speculate, they then claim no one will buy it. It’s the classic “they didn’t do what I thought”. It’s hard to go from low-end to high-end, but starting high-end makes it easier to draw from lower end especially for a company with long-term vision and tenacity like Amazon.
Review Sites
8 out of 10 people rely on online reviews as much as a personal recommendation. People find them trustworthy but should they? The top 5 sites in order are Trip Advisor, Zagat, Open Table, Edmunds, and Yelp. While these are top sites, this is not to say that even they haven’t had complaints or even lawsuits.
It’s important to checkout both good and bad reviews along with other reviews written by that reviewer, but you should generally discount overly positive or negative reviews. Be wary of one time reviewers. Look at a dozen or so reviews over multiple sites. Beware of similar wording as paid bloggers often cut and paste.
To determine if a review is a fake, do an online search of the reviewer and verify if the reviewer has purchased the product. Check out the site with a third-party, and while I have a strict no snitching policy, should you choose to, you can report all fake reviews to the Federal Trade Commission.
Disclaimer: Killing The Breeze is not a registered investment advisor or advisory service. It does not tell or suggest which securities or currencies should be bought or sold. The employees or affiliates of Killing The Breeze may hold positions in the stocks, currencies or industries discussed here. There is a very high degree of risk involved in the market. Killing The Breeze assumes no responsibility or liability for any trading or investment results. All content posted is for educational purposes only and independent advice should be sought from a professional to confirm validity and accuracy of any claim made.
The information should only be a starting point for doing additional independent research in order to allow you to form your own opinion regarding trading decisions. You should ask the firm with which you deal about the terms and conditions of the specific securities which you are trading and associated obligations. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
