Back in the murky depths of the late 20th Century, a sleeping giant was awakened. (Okay, that opening was way too sinister… Let’s try something simpler!) …On 5th July 1994, tinkering with ideas in his garage in Seattle, everyone’s
Who’d have thought
A Bookstore? Huh?
Younger readers would be forgiven for being confused by this, but yes, Amazon started out as an online bookstore. But, as you know, Bezos didn’t want to stop there. He wanted Amazon to be much more than books, once stating that he wanted it to be an “everything store”. Fast-forward 25 years and we can see he wasn’t kidding! Amazon now sells everything from toilet brushes, to tinsel!
But the Amazon of today offers much more than loo brushes and twinkly decorations; it hosts data from all over the world with its cloud-based AWS services; it offers online video and music streaming; app downloads; home assistance, with Alexa (don’t read this out loud!); and now even food stores – all of this has had a dramatic impact on the finances of the company.
Amazon: A Lesson for Traders?
The company has gone from a dingy Seattle garage to rise as only the second in US history – behind Apple (AAPL) – to hit a market capitalization of $1 trillion, propelling its founder to the position of richest man in the world, with a wealth of over $156 billion.
Not bad! But, if anything, Amazon should serve as a lesson to investors and traders all over the world that ‘slow and steady’ really can win the race.
Way back in 1997, when Amazon became publicly listed, a single Amazon share would have set you back just $20 (current share price: $1,982.42).
So, had you in 1997 not gone and seen Titanic 20 times at the cinema and chucked that hundred bucks into Amazon instead, you’d be sitting on a not-too-shabby return of around $120,000 right now. Don’t get us wrong, Titanic was great, but not 120k–great!
If you’re sitting there thinking “What?! Where the hell was I?!” – don’t worry, we know the feeling – we also saw Titanic 20 times (grr!). But, we can also make you feel a bit better. Amazon’s share price hasn’t exactly been a perpetual gravy-train, not by a long shot.
Early investors would likely have been highly disappointed by AMZN’s performance during its first 10 years on the public market. Shares struggled to make any real gains through the early 2000s, following the dot-com bubble.
But things started to look up again in 2008 and 2009, and then even more in 2014. Since then, things have gone a little crazy, with stock price skyrocketing by more than 460%, from $340 a share to $1,982!
What Can Traders Learn from Amazon’s Example?
Are you ready, traders? The key takeaway is: be patient.
Don’t expect to make a return overnight, better still, don’t expect a return, full-stop. Nothing is guaranteed and trading, while potentially profitable, also carries a risk of loss.
Amazon, though, shows us that, at least sometimes, it’s worth sticking around a bit.
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