April 18, 2018
Amazon's annual report was released today. Marking the 20 year anniversary for the Princeton graduate founder. Jim Cramer regarded it as the best one he's ever read. I enjoy Jeff Bezos' annual letters as he reflects on "Day 1" of Amazon in each letter. Bezos continues to impress as the market cap of $AMZN has grown to ~700B. Hard to imagine that Amazon will soon blow by 1 trillion in market cap and maybe even cruise to 7 trillion in market cap.
Mohnish Pabrai's investing principles revolve around making a few small bets. Mohnish considers two numbers when first looking at a company: price and target, if the target isn't 5x, 10x, 100x he doesn't waste his time.
This brings us back to Amazon's 700B market cap. A 10x for Amazon would mean the stock reaches 7T. Hard to imagine, but I am also not willing to rule it out.
Amazon is everywhere and eliminating competition in whatever industry they choose.
Amazon is my largest position. I'm pretty concerned with this, but my strategy of riding the winners keeps me disciplined and process oriented. I know If Amazon stalls other 'winners' will pick up the slack.
I looked at $ADNT for the second or third time today, one of Mohnish's 5 spinoffs for 2018, to see if I had made a mistake about its future. The worldwide leader in car seat manufacturing annual report didn't wow me. I doubled down on passing up on the buying opportunity.
Another company I looked at was Goodyear. Similar to $ADNT this was a company I looked at before and decided to withhold from adding to my portfolio. As I look forward to autonomous driving hitting the road, I want to make sure I invest properly in companies and it is hard for me to get behind a brand that hasn't grown over the past couple of years.
Two Things I Learned Today:
My Toyota Tundra's steering wheel and brake pedal locked up today. When this happens, jiggle the key persistently until the car starts.
My disinterest in video games over the years should not influence my investing decisions. My decision to cut back on video games doesn't reflect the market or future. As my generation ages, video games and E-Sports will continue to shine. I can see myself, friends, millennials playing video games when I, us, we retire. My pick to be the alpha in this industry is Take Two. I think $TTWO initiative to partner with the NBA and create the NBA 2K E Sports League demonstrates the company is forward looking and eager to push the E Sports market forward. Take Two has a market cap of ~11B.
This section can be accredited to Patrick O'Shaughnessy and those fond of the compound effect (learn something new everyday and intelligence will compound).
May 23, 2018
I've read more about how the largest market caps lag the S&P500 and can't help but wonder if Amazon's nearly 800B market cap is too large to succeed. It's something that will play out and hopefully I can confirm later rather than learn from a mistake. I think Amazon, Google, Apple, and Facebook are different than companies in the past. These horses grew fast and will last (longer). They eat competitors and industries and at the moment are heavily invested in the foreseeable future.
Fortnite owner, $TCEHY is my video game alpha now. Fortnite couldn't be bigger. However, $TCEHY falls in the same boat as Amazon. I'm a little skeptical of falling in love with these huge companies.
June 23, 2019
1 year performance of stock's mentioned:
AMZN +9.3%
ADNT -55.6%
GT -38.3%
TTWO -3.7%
TCEHY -10.9%