All those technical indicators which define the market or specific stocks? Rubbish. The stock market is mostly controlled by unknown someones pulling strings behind the scenes or a herd mentality driven by crazy-assed emotions. Here’s a perfect example.
Night And Day
You would think that a company that is well run, profitable and growing, and which has customers standing in line to buy products would be in favor on Wall Street.
If so, both Apple and Samsung should have stock prices reflecting that sentiment. Instead, their stocks are punished because both companies focus on profitability.
Instead, the market seems to reward companies for taking risks, working toward the future, which seems to be a euphemism for failing to make a profit.
Two perfect examples are Apple and Amazon. The latter is a money-losing machine which grows revenue, but can’t figure out how to make a profit. The former is a money-making machine with more legs on the profit stool than anything from Ethan Allen.
Need I say more?
Yes. Amazon just lost another ton of money, although revenue went up, and the market responded by pushing the company’s stock to record levels.
Does anyone besides me see something wrong here? Apple made more profit last quarter than Amazon has ever made in the company’s entire history, and that quarter alone gave Apple more money than Amazon has in the bank.
No Guts, No Glory
Chalk it up to chutzpah and hubris. Apple tells the world how many of what it sells, but Amazon remains quiet on the money-losing Kindle effort. Instead, the online giant announced it would hire a few thousand more workers and Wall Street applauded.
What’s wrong with this picture? It’s like yesterday’s fish wrapped up in a newspaper and left on the doorstep. Sure, looks like a newspaper delivery, but it stinks inside.
Apple tells the world how much it will sell and make a quarter ahead of time and seems to deliver, year after year. Amazon says exactly squat about where it makes or loses money, and stock-buying sheeple rally the company’s stock to new heights.
Why? Because Amazon is bold and daring, while Apple is boring, appears defensive, and supposedly is losing the panache and vision that made the company great. If Amazon is so bold and daring then it should buy Radio Shack to compete with Apple, Samsung, Microsoft, and Best Buy (and make a great pick up place for Amazon packages).
Amazon is a big company in the U.S. but internationally, the company has struggled to grow. Meanwhile, Apple gets most of its sales and profits from countries other than the U.S.
I’m convinced that shareholder value isn’t based upon numbers.