Three to Read this Thanksgiving Weekend

Written by

Jae Jun

follow me on



If you are in the US, I hope you are enjoying your thanksgiving weekend.

Now that you have had some time to digest all the food from the past two days, here are three things to read this weekend.

Profile on Jeff Bezos >>

FORTUNE — Jeff Bezos likes to read. That’s a dog-bites-man revelation if ever there was one, considering that Bezos is the cerebral founder and chief executive of a $100 billion empire built on books.

Death by a Billion Clicks: Best Buy’s Attempted Turnaround >>

Just a few years ago, Best Buy was hailed as one of the finest retailers in the world. It had vanquished its rival, Circuit City, and was likely selling more electronics per square foot than any other company. But by 2012 it was in tatters.

H.P. Takes $8.8bn Charge on ‘Accounting Improprieties’ at Autonomy >>

Months of investigation followed, prompting Hewlett’s accusations on Tuesday that the British software maker, Autonomy, had engaged in “serious accounting improprieties.” Before the deal, H.P. claimed, Autonomy inflated its sales. The problems went undetected by outside accountants — both Autonomy’s auditors and a firm H.P. hired to vet the deal.

  • As a consumer I love Amazon, but as a businessman who sees healthy margins as the signs of a healthy business I am more than a little skeptical of their model. I can see their growth ending one of a few ways, but most outcomes seem negative for owners of Amazon in the long run.

    To get this out of the way as a stock it’s shares are trading at a ludicrous price. Will it continue to rise? Perhaps… we all know how irrational the market can be, but you can’t escape the inevitable fact that a businesses value is based on it’s ability to generate PROFIT.

    As a company I think the model is flawed. I foresee rapid revenue growth and expansion followed by rapid contraction. With razor thin margins Amazon is running a major risk of being squeezed should they face a negative event in any of their market segments.

    On the other hand they could be grabbing market share at razor thin margins with the goal of establishing an essential monopoly before increasing margins to take advantage of their position. This could work, but their customer base is largely built on the low prices they offer. While it would take a long time for brick and mortars to work their way back in to the market if they increase margins down the road; a “new” e-commerce competitor could jump up over night in any given market segment.

    My comment is not meant to be an analysis, but merely represents the conclusions that I have come to. I like the company as a consumer; but I just don’t think it has the staying power in its current form. And don’t even get me started on the stock price….

  • Good deep thoughts and observations. Here’s my interpretation of it.

    Let me first seperate the stock price and the business. I too think the stock price is crazy. Far too much optimism, no mistake in that. People are just going for the growth story behind amazon.

    But about the business. Their razor thin margins is their advantage. A moat can exist in the form of low prices and this is where amazon rules. Their brand power is also enormous. If you look at, it was taken over by a Japaense ecommerce giant, but in comparison to Amazon, it is very far behind.

    I don’t see a new competitor being able to even remotely replicate what Amazon has been able to do.
    For an ecommerce to be as successful as amazon, it not only needs low prices, but the infrastructure to match. Their warehousing, inventory management, customer service and logistics just cant be beat.

    Amazon has a very wide moat and their constant focus on invention and entering new markets should keep them going for a long time.

    It’s just the stock price I don’t like.