Amazon shares - risk to reward ratio?

Steve182

itwasntme001 said:

Steve182 said:

george4064 said:

@Steve182 are your Amazon shares held within a globally diversified portfolio? Because if not, you are really excluding yourself from exposure to many other companies that may well perform better than Amazon over the long-term. So why restrict yourself to one company?

Amzn is my largest individual holding by some margin, but I also own the following -

Alibaba
Alphabet
BATS
Burford Capital
Cara Therapeutics
DGOC
DS Smith
Fundsmith
Imperial Brands
JD.com
Lindsell Train IT
Lindsell Train global equity
Microsoft
MJ Gleeson
Northern VCT
Persimmon
RDSB
SMT
Smithson IT
Sylvania Platinum
Tencent Holdings
Universal Display

Interestingly I own about 9 stocks/funds out of your list.  Despite the recent poor performances, I do continue to like tobacco stocks and hold both BATS and IMB.

May I ask if you have had the confidence to increase your holding in tobacco during this dip? I recently sold 2/3rds of my IMB at a loss and bought more DGOC which I think has a more sustainable dividend and better long term prospects.

itwasntme001

Steve182 said:

itwasntme001 said:

Steve182 said:

george4064 said:

@Steve182 are your Amazon shares held within a globally diversified portfolio? Because if not, you are really excluding yourself from exposure to many other companies that may well perform better than Amazon over the long-term. So why restrict yourself to one company?

Amzn is my largest individual holding by some margin, but I also own the following -

Alibaba
Alphabet
BATS
Burford Capital
Cara Therapeutics
DGOC
DS Smith
Fundsmith
Imperial Brands
JD.com
Lindsell Train IT
Lindsell Train global equity
Microsoft
MJ Gleeson
Northern VCT
Persimmon
RDSB
SMT
Smithson IT
Sylvania Platinum
Tencent Holdings
Universal Display

Interestingly I own about 9 stocks/funds out of your list.  Despite the recent poor performances, I do continue to like tobacco stocks and hold both BATS and IMB.

May I ask if you have had the confidence to increase your holding in tobacco during this dip? I recently sold 2/3rds of my IMB at a loss and bought more DGOC which I think has a more sustainable dividend and better long term prospects.

I have owned these for a number of years and have not added since original purchase.  Doesn't mean I do not like them, it is just there were better places to put my money and I don't want to increase exposure.  But happy to hold what I have in these because IMO risk reward is favourable.

Thrugelmir

itwasntme001 said:

Amazon stock has been going up in line with the increase in its free cash flow.  Whilst its earnings have remained pretty low given it reinvests its CF back into the business in order to generate more CF.  

Amazon follows the long tried and tested method of using its suppliers to fund it's growth. 

AnotherJoe

Steve182 said:

Malthusian said:

Steve182 said:

Yes, I'm old enough to remember what happened. About a year after the .com bubble burst I remember receiving a pension statement (it was an occupational scheme run by L & G) and I looked at the total pot value vs total contributions. They were practically identical. I remember thinking I could have just put the money under the mattress and had the same outcome.

Except the money under the mattress would always have been worth what was put in, whereas the money in the pension had a return of +0% for only that single moment after the lost decade. Then it went up again and has never been at +0% ever again, whereas the money under the mattress will always be at zero.

I'm very conscious of exaggerated valuations and P/E ratios.  If any of my holdings start looking anything like Tesla does right now I will just sell them and take profits, and maybe keep some dry powder ready for the next dip.

Tesla doesn't make any money (notwithstanding recent positive quarterly results) so P/E ratios are irrelevant to it. Are you saying that you'll sell Amazon if it suddenly starts losing money?

I know P/E ratios are not relevant to Tesla, when I said valuations I should probably have said fair value instead. That's one reason I never bought Tesla. I don't understand how to value it. I wish I did/had. What I can now see is that at +800% or whatever it has increased in 1 year it's hard to see any short-med term upside 

Tesla shares did almost nothing (stock price wise) for 4 or 5 years. Then it shot up. Had it appreciated more gradually to get where it is now would you be thinking differently? I suggest you would. They are  where they are now because they proved they can do what they said they would back in 2013 or so and eventually the penny dropped despite a very clear campaign by some to destroy them. A growth rate that at the time was thought laughable by those experienced in teh automotive industry and so called expert analysts.

I believe its still got at least a 2x and most likely a 4-5X in it over the next 3 or 4 years.

 

Or look at it a different way ;

If you believe that

- Electric cars are the future. The near term future happening right now.

-That Tesla make unmatched EVs with  a far superior charging network on top

-With prices that destroy other competitors above the £40k or so price range.

- Are not held back technologically because they cant afford to embarrass their internal combustion engine models*

- And they will be bringing out a lower priced model which the likes of teh Japanese and Koreans will find hard to match ....

Why would you not invest?

(and let me help you out, if you dont believe those things to be true, you are wrong )

* Just look at Porsche. Sales of their new EV (which BTW is inferior to Tesla in range acceleration and cost (2x cost)) are up 75%. Sales of their ICE models have cratered. BUt they dont have the manufacturing capability or battery supply to supplant their ICE models for maybe 5 years at least.

Steve182

AnotherJoe said:

Steve182 said:

Malthusian said:

Steve182 said:

Yes, I'm old enough to remember what happened. About a year after the .com bubble burst I remember receiving a pension statement (it was an occupational scheme run by L & G) and I looked at the total pot value vs total contributions. They were practically identical. I remember thinking I could have just put the money under the mattress and had the same outcome.

Except the money under the mattress would always have been worth what was put in, whereas the money in the pension had a return of +0% for only that single moment after the lost decade. Then it went up again and has never been at +0% ever again, whereas the money under the mattress will always be at zero.

I'm very conscious of exaggerated valuations and P/E ratios.  If any of my holdings start looking anything like Tesla does right now I will just sell them and take profits, and maybe keep some dry powder ready for the next dip.

Tesla doesn't make any money (notwithstanding recent positive quarterly results) so P/E ratios are irrelevant to it. Are you saying that you'll sell Amazon if it suddenly starts losing money?

I know P/E ratios are not relevant to Tesla, when I said valuations I should probably have said fair value instead. That's one reason I never bought Tesla. I don't understand how to value it. I wish I did/had. What I can now see is that at +800% or whatever it has increased in 1 year it's hard to see any short-med term upside 

Tesla shares did almost nothing (stock price wise) for 4 or 5 years. Then it shot up. Had it appreciated more gradually to get where it is now would you be thinking differently? I suggest you would. They are  where they are now because they proved they can do what they said they would back in 2013 or so and eventually the penny dropped despite a very clear campaign by some to destroy them. A growth rate that at the time was thought laughable by those experienced in teh automotive industry and so called expert analysts.

I believe its still got at least a 2x and most likely a 4-5X in it over the next 3 or 4 years.

 

Or look at it a different way ;

If you believe that

- Electric cars are the future. The near term future happening right now.

-That Tesla make unmatched EVs with  a far superior charging network on top

-With prices that destroy other competitors above the £40k or so price range.

- Are not held back technologically because they cant afford to embarrass their internal combustion engine models*

- And they will be bringing out a lower priced model which the likes of teh Japanese and Koreans will find hard to match ....

Why would you not invest?

(and let me help you out, if you dont believe those things to be true, you are wrong )

* Just look at Porsche. Sales of their new EV (which BTW is inferior to Tesla in range acceleration and cost (2x cost)) are up 75%. Sales of their ICE models have cratered. BUt they dont have the manufacturing capability or battery supply to supplant their ICE models for maybe 5 years at least.

I don't dispute the facts you have posted, and you may well be right about the future SP. I've done "OK" with Tesla due to being a long term holder of about 8500 SMT shares. As I understand it Anderson/Slater recently reduced the SMT holding in Tesla from 15% down to 5% (due to rules on stock holding size and presumably also for strategic reasons) but remain committed to continuing their investment in the company. I believe Anderson has said that they remain open to the possibility of buying more in the future should they be presented with buying opportunities. I will continue to watch that space.....

AnotherJoe

Steve182 said:

AnotherJoe said:

Steve182 said:

Malthusian said:

Steve182 said:

Yes, I'm old enough to remember what happened. About a year after the .com bubble burst I remember receiving a pension statement (it was an occupational scheme run by L & G) and I looked at the total pot value vs total contributions. They were practically identical. I remember thinking I could have just put the money under the mattress and had the same outcome.

Except the money under the mattress would always have been worth what was put in, whereas the money in the pension had a return of +0% for only that single moment after the lost decade. Then it went up again and has never been at +0% ever again, whereas the money under the mattress will always be at zero.

I'm very conscious of exaggerated valuations and P/E ratios.  If any of my holdings start looking anything like Tesla does right now I will just sell them and take profits, and maybe keep some dry powder ready for the next dip.

Tesla doesn't make any money (notwithstanding recent positive quarterly results) so P/E ratios are irrelevant to it. Are you saying that you'll sell Amazon if it suddenly starts losing money?

I know P/E ratios are not relevant to Tesla, when I said valuations I should probably have said fair value instead. That's one reason I never bought Tesla. I don't understand how to value it. I wish I did/had. What I can now see is that at +800% or whatever it has increased in 1 year it's hard to see any short-med term upside 

Tesla shares did almost nothing (stock price wise) for 4 or 5 years. Then it shot up. Had it appreciated more gradually to get where it is now would you be thinking differently? I suggest you would. They are  where they are now because they proved they can do what they said they would back in 2013 or so and eventually the penny dropped despite a very clear campaign by some to destroy them. A growth rate that at the time was thought laughable by those experienced in teh automotive industry and so called expert analysts.

I believe its still got at least a 2x and most likely a 4-5X in it over the next 3 or 4 years.

 

Or look at it a different way ;

If you believe that

- Electric cars are the future. The near term future happening right now.

-That Tesla make unmatched EVs with  a far superior charging network on top

-With prices that destroy other competitors above the £40k or so price range.

- Are not held back technologically because they cant afford to embarrass their internal combustion engine models*

- And they will be bringing out a lower priced model which the likes of teh Japanese and Koreans will find hard to match ....

Why would you not invest?

(and let me help you out, if you dont believe those things to be true, you are wrong )

* Just look at Porsche. Sales of their new EV (which BTW is inferior to Tesla in range acceleration and cost (2x cost)) are up 75%. Sales of their ICE models have cratered. BUt they dont have the manufacturing capability or battery supply to supplant their ICE models for maybe 5 years at least.

I don't dispute the facts you have posted, and you may well be right about the future SP. I've done "OK" with Tesla due to being a long term holder of about 8500 SMT shares. As I understand it Anderson/Slater recently reduced the SMT holding in Tesla from 15% down to 5% (due to rules on stock holding size and presumably also for strategic reasons) but remain committed to the company. I believe Anderson has said that they remain open to the possibility of buying more in the future should they be presented with buying opportunities. I will continue to watch that space.....

I wouldnt be surprised if they topped up again very recently when it dipped back to 350.

I know Ark did, after selling to get back down to under 10% in August they topped up again.

planteria

Steve182 said: Is anyone else in a similar position or mindset to me and wishes to share their thoughts?

similar in that Amazon makes up a significant portion of my portfolio. i first bought at $500. i have taken profits elsewhere and for a time kept seeing Amazon as 'the best bet' so continued to buy. my average cost is $1013. i also started to buy Alphabet alongside.. at last crunching, just over a month ago, i was sat with 38% Amazon and 18% AlphabetA. i'm not planning to sell, but i'm not looking to add to either of these holdings either.. i continue to invest in other assets alongside.

AnotherJoe

planteria said:

Steve182 said: Is anyone else in a similar position or mindset to me and wishes to share their thoughts?

similar in that Amazon makes up a significant portion of my portfolio. i first bought at $500. i have taken profits elsewhere and for a time kept seeing Amazon as 'the best bet' so continued to buy. my average cost is $1013. i also started to buy Alphabet alongside.. at last crunching, just over a month ago, i was sat with 38% Amazon and 18% AlphabetA. i'm not planning to sell, but i'm not looking to add to either of these holdings either.. i continue to invest in other assets alongside.

Thats how I ended up with about 40% my assets in Apple until recently, i bought some, bought some more, and held for about ten years.

I've since cut back a bit on my holding as I'm buying a house so I thought I'd turn some of it into something i can use, no pockets in a shroud etc. And the kids get some cash as well.

Ive got some Alphabet also but thats not done as well as i expected it would. But I'll hold.

 

[Deleted User]

AnotherJoe, it looks from the above, and other of your your posts, that you are doing really super, running up big positions in the likes of Apple and Tesla. Well done again.

I'm just wondering how that fits with your advice from August '19.

Isn't one of the main points of investing in a multi asset fund that contains shares in a lot of individual companies simply to avoid losing a large proportion of your money as you could if you were to invest in just four companies and one of them was destroyed by some internal financial scandal or the like?

"I agree, but it was ZPZ who suggested just 4 shares which brings in the random element you mention.

If you wanted to pick your own I'd suggest minimum 10 and better 20 for the reasons you mention, and 50% of those should be ITs or ETFs as well.

My strategy is a backbone of global pooled investments (ITs funds and ETFs) and direct shares plus pooled investments to emphasis particular areas (in my case, healthcare and sustainable energy). Plus the odd wildcard side bet."

kinger101

ZingPowZing said:

AnotherJoe, it looks from the above, and other of your your posts, that you are doing really super, running up big positions in the likes of Apple and Tesla. Well done again.

I'm just wondering how that fits with your advice from August '19.

Isn't one of the main points of investing in a multi asset fund that contains shares in a lot of individual companies simply to avoid losing a large proportion of your money as you could if you were to invest in just four companies and one of them was destroyed by some internal financial scandal or the like?

"I agree, but it was ZPZ who suggested just 4 shares which brings in the random element you mention.

If you wanted to pick your own I'd suggest minimum 10 and better 20 for the reasons you mention, and 50% of those should be ITs or ETFs as well.

My strategy is a backbone of global pooled investments (ITs funds and ETFs) and direct shares plus pooled investments to emphasis particular areas (in my case, healthcare and sustainable energy). Plus the odd wildcard side bet."

I suspect most of us do things that we wouldn't advise a stranger to do.