Amazon Touches $250

Earlier today, shares of Amazon.com ($AMZN) finally touched $250. That’s an astounding run since the comapny’s IPO more than 15 years ago. What’s interesting is even if bought Amazon at its 1999 peak of $113 per share and held on, you would have more than doubled your money 13 years later. The S&P 500, by contrast, is still down.

The problem, of course, is the “and hold on” part. Would you have been able to watch your initial investment at $113 plunge all the way down to $5.51 as Amazon did after 9/11? I doubt I could.

Wall Street currently expects Amazon to earn $2.38 per share next year. That means the stock is going for 105 times earnings. I don’t think this will end well.

Posted by on August 30th, 2012 at 11:31 am


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