amazon stock

[coffeespoon]

Hi Everyone,

Hope you are all having a good Golden Week.

I am a novice investor, and I have been reading up on investing and get the weekly newsletter from RetireJapan, etc. I have some mutual funds and do NISA.

Long story, but recently I closed an investment account (where the ending value was much much higher than when I started it a long time ago. It is now sitting in a bank account, but I want to make that money "grow". ). I am thinking about reinvesting the money from it in other funds (mostly index funds). However, I was wondering if it was also worth also buying one share of amazon stock. Looks like the price was $1938 .43 (April 29) yesterday.

Do you guys think that the stock is reasonably valued?

If I buy it, I wouldn't cash it right away... I envision keeping it for many years.

Thanks for any feedback.

[RetireJapan]

I have no idea. Price/earnings is 80! But their earnings may be artificially low as they reinvest a lot back into new businesses. Will they continue growing? Will they be broken up by governments? Will a competitor come along and wipe them out?

If you buy an index you will also own a piece of Amazon. Buying more of it is a bet that they will outperform.

If you want to give it a shot and can afford it (and are investing into sensible things with most of your portfolio) I wouldn't tell you not to.

But I'm the guy that bought Bitcoin pretty much at the peak and lost a not inconsiderable amount of money

[captainspoke]

If you have access to the US market, I'd suggest a growth ETF. Something like VOOG, SPYG, IWY, or MGK will have it in their top ten holdings, and I'd guess 5-8% of any of those would be invested in amazon.

If you're US and investing here, and trying to buy individual names/stocks to avoid buying funds (due to PFIC reporting), one strategy might be to look at the top 10-20 holdings of those ETFs (etfdb.com) and work towards a similar list (probably over several years).

(Bottom line is that I'm suggesting diversification, one way or another.)

[Jansen]

I'm one of those guys trying to get rich slowly quickly, such that 75% of my allocation is in tech stocks. Some people like FAANG, I personally prefer MAGA (Microsoft, Apple, Google, Amazon). I can't tell if you it's reasonably valued or if it's a good buy now. I just want you to know that tech stocks sometimes get rather temperamental and you really have to be honest with yourself when this happens.

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[TokyoWart]

About 20 years ago a French expat who worked under me in Japan left to go work at Amazon’s HQ. Of course I see now that I should have invested then but AMZN is a really difficult stock to evaluate because their earnings are voluntary and only taken when it suits their tax strategy. I eventually bought a few shares with a basis around $400 but I suspect I could still lose money on that if any of the risks mentioned above came calling. I have no idea how to value this stock. Like others here I recommend basing your portfolio on index funds and only put money in a stock like this if you can afford to lose it.

[coffeespoon]

Thanks for your advice! You guys were all very helpful!!!