Why is Amazon Favored over Walmart?

June/26/2017 10:18AM
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Not by consumers, but by communities. Communities described by me as the investment community, the public forum, and the political arena.

Walmart has been maligned for a multitude of reasons. First, they supposedly destroyed downtowns in small cities across this country. Next, they paid an unfair wage. This led to the biggest issue since they were non union and became the biggest service union target along with McDonald’s. Walmart stock has been almost level over the past 5 years. The annual earnings have been in the neighborhood of $16 billion per year.

The city of Chicago, which just achieved junk bond status, froze Walmart out of the city for years. Basically, the city is a union city, see first sentence, and were trying to use the zoning leverage to unionize the company. Poor people in the city needing bargain prices for quality goods be damned. The media have used the company to force a $15 minimum wage.

Walmart seems to be suffering as are all retailers hurt by the online buying trend. Walmart being slow to get their act together in this area may spell disaster. Amazon is putting the hurt on them while killing shopping malls and big box retailers across the country.

Has Amazon become the doormat that Walmart became?

Amazon stock price 5 years ago was $248 a share. Today it is $1,003 . For the most part in 20 years of doing business Amazon never made a profit. That changed in the past two years. In 2013 the PE for Amazon was 550 vs. 2 for Walmart Stores. Analysts indicate much of the profit for Amazon in the past 8 quarters come from their cloud computing business. Amazon is nonunion. Is there a hue and cry to unionize them? Not that I’ve seen.  Are they paying $15 an hour?

What is the average salary at Amazon?

Amazon Salaries
Job TitleAmazon Salary
Warehouse Associate – Hourly$12.53/hr
Area Manager$66,233
Amazon Warehouse Worker – Hourly$12.40/hr
Senior Product Manager$129,074

No, hourly pay is pretty much in line with that of Walmart.

How does Amazon fly under the radar when they are doing essentially what Walmart was doing 20 years ago? Why do investors keep driving up the stock price while ignoring Walmart?

Jeff Bezos, the founder of Amazon is a member of the club. The club is the far-left liberal group that can do no wrong in the eyes of the media. Jeff bought the Washington Post to insure he controlled the news. Members of the club are well known : Elon Musk(Tesla and Solar City and failed moon shots),  Larry Page and Sergey Brin(Google), Mark Zuckerberg (Facebook), etc. Elon will now put a Tesla roof on your house for $65K (3000 sq. ft. ) made of solar panels that look like French slate. Woe to those who don’t join the club. Can you say, Travis Kalanick(Uber) who has been trashed by the media and forced out of the company he founded. How did that work out for Apple and Steve Jobs?

Seems the answer for investors today is invest in the man or woman, not the company or the results. Trust that these masters of startups, who don’t make money, will eventually make money. But, is that a good plan?

Ford Motor just canned their CEO because he’s not more like Elon Musk and hired an office furniture executive to run Ford.

Uber fights with cities across the country because they put union cab drivers out of business. Bad, Uber must go. Amazon closes malls and established retailers shut down and all those jobs go away, but Amazon is not bad.

Do we have media idiots making investment decisions for us by picking their winners and losers? What if they are wrong, as usual? Amazon buys Whole Foods, good or bad? Republicans who favor Trump get tired of buying from Jeff Bezos who trashes Trump daily in his newspaper, the Washington Post, and buy on line elsewhere. Hmm, whatever happened to the Dixie Chicks? The media brought down Travis Kalanick and builds up Musk, Bezos, and Zuckerberg, who seems to be running for political office these days. Be wary, my friends, nothing like real profits to cement a solid investment.

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