By Lennox Yieke - May 2, 2013 | Tickers: AMZN, AAPL, EBAY | 0 Comments <\/p>\n
Lennox is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited. <\/p>\n
When you talk about tech, you talk about high risk, high reward. Tech is what you use today and throw away tomorrow. Recall the pager? At one time, owning one was the in thing. Now, however, walk around with one and you will be hit with comments like, Hey friend, the 90s called, they want their pager back. <\/p>\n
The tech sector is by far the most volatile area to invest your money in. In fact, renowned value investor and multi-billionaire Warren Buffett knows this. He has recurrently avoided tech stocks and has, on several occasions, publicly said that he was not in a position to predict the future of social-media giant Facebook and iPhone-maker Apple (NASDAQ: AAPL)). Buffetts only prolific bet on tech was his huge 2011 IBM buy; a $10.5 billion buy that secured him a 5.4% stake in IBM. <\/p>\n
Despite the volatility in tech, I personally believe that there are a few players with predictable futures; tech players that not only have forward-looking prospects but that also exude the all-important element of longevity. One such player is Amazon.com (NASDAQ: AMZN)). <\/p>\n
I know whats going through your mind right now. Isnt that the stock that saw its past quarters net income drop a staggering 37%? Yes it is. However, the decrease in profit was a sacrifice that, in my opinion, signals the companys inclination toward long-term growth. <\/p>\n
Tradeoff between immediate returns and long-term growth <\/p>\n
As ancient philosopher Plato would have put it, \"better be ignorant of a matter than half know it.\" Amazons 37% decline in profit did not happen without good reason. In fact, the companys top line increased notably, gaining 22% year-over-year to come in at $16.1 billion from $13.2 billion a year earlier. The reason behind the strained margins was the managements conscious decision to spend more on growth-disposed projects. <\/p>\n
One such project is the building of distribution warehouses throughout the country. These warehouses are close to key metropolitan areas such as New York and San Francisco. The building project has gone on for a while now, and more and more warehouses are popping up throughout the country. <\/p>\n
Whats the catch with huge brick-and-mortar establishments? <\/p>\n
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Link: By Lennox Yieke - May 2, 2013 | Tickers: AMZN, AAPL, EBAY | 0 Comments Lennox is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited. When you talk about tech, you talk about high risk, high reward. Tech is what you use today and throw away tomorrow Continue reading
\nAmazon Promises Longevity<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"