Quantcast
Home / Columnists / Berko / Sold on Amazon’s service but not stock price

Sold on Amazon’s service but not stock price

Dear Mr. Berko: Like many seniors, my wife and I have become disappointed with the shopping experience in most retail stores.

Sales personnel do not know the inventory, they mangle the language, resent showing their product and many don’t give a darn.

And twice last month, we were given incorrect (too much) change from the register.

The background music in many retail stores is grating, inventory is stuffed on racks like sardines in a can, price tags are misplaced, sales help is not available and it can take 10 minutes to find someone at a cash register.

Now my wife and I have decided to shop online or by catalog, and one of the online companies we are very pleased with is Amazon.com.

We think more people are fed up with the quality of service and will also shop online. So we would like to buy 30 shares of Amazon.

Please give us your thoughts on this company. –R.W., Des Moines, Iowa

Dear R.W.: I, too, enjoy shopping at Amazon.com (AMZN, $190).

AMZN’s employees are courteous, parking is never a problem, prices are clearly marked, product description is clear and the checkout line is a click away.

But R.W., you complain too much. You expect too much from these young people, and your standards are unrealistic.

Unfortunately, old folks like you and your wife insist on impossible performance from our young and have set the bar so high that our public education system is incapable of graduating successful young adults.

We must lower our educational expectations, goals and requirements. Math must be made simpler, geography and history require too much information, and teaching standards must be lowered so grades and graduation rates improve.

As you can see, our school system is failing the current generation because its old-fashioned goals are beyond the reach of today’s youngsters.

We have a physician shortage because medical school admissions are too restrictive. We lack good folks in our state and federal government agencies because unrealistically difficult civil service exams preclude the hiring of good people.

So R.W., stop tilting at windmills and get in step with how things should be, rather than how you want them to be.

A decade ago, I didn’t think AMZN would make it. I was egregiously wrong.

AMZN has good people, attractive pricing, superb product promotions, myriad customer incentives and great marketing that keep shoppers coming back and spending more with each visit. But I wouldn’t touch any stock that trades at 74 times earnings with a pogo stick.

And while I think AMZN’s earnings of $2.53 per share can triple by 2015, I’m as certain as cider that the stock will not trade at 74 times earning, or $560 a share, in four years.

While AMZN is a growth stock, the Street has given it a shameful value way beyond any plausible extension of reality. Realistically, AMZN should trade between 25 and 30 times earnings.

I value the company but do not value the price, and I suspect those who recommend the stock at this high premium are smoking dope.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

 

Scroll To Top
%d bloggers like this: