Thinking about buying Amazon ($AMZN)? Think again – May 5, 2022


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Dan Fitzpatrick, here. I want to look at Amazon ( NASDAQ: AMZN ); I actually don’t want to look at Amazon ( NASDAQ: AMZN ) because it is “fugly”, but I am doing it anyway because I guess I am a masochist.

Look, Amazon ( NASDAQ: AMZN ), you have got to stay away from this stock. I know there are a lot of “Amazonians” out there, there always are the glory days and all that. Look at that, you have got to stick with Amazon ( NASDAQ: AMZN ), if you had only held Amazon ( NASDAQ: AMZN ) you would be up almost 1200 percent.

Okay fine, but since the high, if you had held Amazon ( NASDAQ: AMZN ) you would only be down 37 percent. Okay, 37 percent versus that 1200, 1100 percent, that’s fine. But you don’t get to go back and buy the stock and then hold it through all this chop, you are making a theoretical comment.

What I am talking about here is this, at some point, the bloom comes off the rose. Yes, but it’s Amazon ( NASDAQ: AMZN ). How many years has that been appropriate? I would say that we use Amazon ( NASDAQ: AMZN ), still, to hang all of our data. We pay Amazon ( NASDAQ: AMZN ) a lot of money to put all of our video stuff up there.

The point is, that there are a lot of reasons to be bullish on Amazon ( NASDAQ: AMZN ). But what is a surprise? What is it that is actually new that nobody knows about or that maybe people are just finding out about? Oh, Jeff Bezos bought a bunch of Rogaine. Well, that is not going to change the price of the stock it will just kind of make him look silly. The point is on this, that at some point all the good stuff has been factored in.

And so, even if there are good things on the horizon, even if there is good stuff coming up, it is still Amazon ( NASDAQ: AMZN ), and blah, blah, blah. Yes, but market prices in future growth. It prices in better times ahead, stronger earning, higher revenue, which ultimately has to lead to stronger earnings, higher earnings, stuff like that. It has to lead to a bigger profit than you are in now. The market anticipates that stuff, it projects, it’s optimistic.

But then, if that story starts to turn, even if the turn is, do you know what? Things are great, look, they are not quite as great as everybody thought they were but they are still awesome. Well, awesome can still lead to a reevaluation of a stock, of a company. Because the idea is, that analysts and traders are chasing growth higher.

They are trying to stay ahead of it. They are trying to look at how a company is growing. Looking at the fundamentals and saying, wow, I had my price target on this at $100.00. The stock was trading at 75.00 at the time and I really did think that the fundamentals were going to lead to greater growth, stronger growth.

But for crying out loud, the stock is already up $105.00, the company is putting up numbers that are off the charts. At this rate, I have got to raise my price target to 150.00 or 175.00. And they do that because they look at the great performance of a company now. And they extrapolate into the future based on the prior history of the fundamentals of the company.

Well, as soon as the trend from the prior history stops accelerating and even just falters a little bit, suddenly the price targets start falling like leaves in the fall, they just start coming down. That, my friends, is what has been happening, but it is certainly what is happening to Amazon ( NASDAQ: AMZN ) now.

Now, at some point, perhaps we will get a move higher but it isn’t going to be next week. It is not going to be the week after that. Maybe it will be in August when they report earnings next but do you really that that earnings number is going to push this stock to new highs? Let’s say it pushes it up this far, yippee ki-yay. What is going to happen between now and August? Maybe this distance is going to start from down here because the stock kept falling.

What I am saying is this, if you are still fixated on Amazon ( NASDAQ: AMZN ) you are really boring and you need to get a life, and you need to get some imagination. Don’t be doing this. Leave this thing alone, just leave retail alone, leave tech alone, and buy Exxon ( NYSE: XOM ).

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