Episode 10 – Amazon & Jeff Bezos, the World’s Richest Man

This is the transcribed version of the Podcast linked above ^^^

MATT: [00:00:00] Hello I would like to talk to you about the one minute trader we are here to take the time strapped trader and turn them into a profitable, money making machine with daily ideas that give you, the trader on the go, a reason to trade with risk defined and profits taken when able. I’m Matt Davio and this is the One Minute Trader Podcast.

 

MATT: [00:00:46] OK welcome back to the One Minute Trader Podcast. Hi am your- Often fearless leader. I was fearless this week heads some trades on Thursday we had a major sell off and I wanted to talk a little bit today about keeping score since we are in the North American country of the United States where we really like to keep score. Tony. Let’s talk a little bit about Bill Gates.

 

TONY: [00:01:29] If you’re not first your last.

 

MATT: [00:01:30] Well, maybe. Interesting that Jeff Bezos and Bill took over. Bill Gates is not so gosh think about the money that’s flowing through the Seattle area now with two of the largest publicly traded corporations being Amazon and Microsoft. Microsoft is at all time highs. Pretty much. And Amazon definitely hit an all time high this week but it also was running in anticipation of earnings. And just as soon and this always happens it happened. I remember Carlos Slim took over as the richest man in the world at one point. You know maybe two or three years ago during that during some of the down times.

 

TONY: [00:02:21] Is he Mexican telephones.

 

MATT: [00:02:23] Yeah use the telephono de Mexico is where he made his money. But then he’s he’s you know diversified in a great number of places. And what’s fascinating about it is now you know by all means everybody is we all use Amazon. Are you a prime user?

 

TONY: [00:02:41] I’m a longtime prime user.

 

MATT: [00:02:42] Are you really? And I’m curious like what besides ordering books and audible books on audible now. You know what kinds of things do benefit with your Prime membership because you get you can watch movies now and they self-produce and have their own filmmaking production company. I’ve got some good stuff on there and it’s really good. They won Emmy’s. Yeah that’s a good one.

 

TONY: [00:03:13] They partnered with HBO and I’m going back and watching Sopranos which I missed the first go-around.

 

MATT: [00:03:17] That’s cool. And Showtime didn’t get.

 

TONY: [00:03:19] Showtime’s on there.

 

[00:03:22] I think you can get stars. So basically you know you really think about the cord cutting that can go on with having some of these services now. You know Amazon really I think their big play has been the Web Services that’s a really big deal. AWS you know and I just saw today you know the web hosting service is huge especially with the video. So even when you think of somebody like face talking about video game video right. Well that was a pretty there and they’re probably going to host that video for somebody somehow via the aid of U.S. service so it’s a really big component. The other thing that I’ve heard rumors and it’s just rumors slack which I know it’s Amazon has been rumored for some time to possibly purchase slack. And that would have been when they were talking about it their biggest purchase they were talking about an 8 billion dollar price tag before that their biggest acquisition to date. So if they would have bought slack which in fact that may have been a diversionary tactic for them to go out and buy whole foods which they did go out and buy. 14.7 billion so it was much bigger than the 8 billion.

 

TONY: [00:04:36] Get the rumor mill aimed toward slack.

 

MATT: [00:04:39] You know there’s there’s a lot to be said about strategy, corporate strategy, especially in the M&A world. They’ve definitely been in talks with slack and they probably had some interest but absolutely I mean this was probably a good diversion for the public who didn’t think they would ever buy somebody like Wholefoods now. You know so with all these products coming online you know how do you view Amazon and like what kind of company would you, you know, put them into.

 

TONY: [00:05:10] I think for me personally I’m just blown away by the distribution Bezos’s has with everything. I meanyou showed me today those lockers today in apartment buildings but also like the drone technology he’s using to deliver groceries and-

 

TONY: [00:05:23] He’s got a whole space program.

 

TONY: [00:05:25] Everything just-

 

MATT: [00:05:26] I mean he does have a space program he’s got a drone delivery you know possibility going on. Alexa has been a huge success which is interesting because the guys that kind of formed Alexa were the guys that kind of started Siri.

 

TONY: [00:05:39] Yeah.

 

MATT: [00:05:40] And so he kind of stole those guys and really the same idea that Apple just has been sitting her every year but Apple really did not take advantage of that. And I wonder if Steve Jobs would have.

 

TONY: [00:05:52] Now that I think about it if he acquired Zappos. They had excellent distribution centers.

 

MATT: [00:05:58] Yeah.

 

TONY: [00:05:58] Yeah.

 

MATT: [00:05:59] Well in a lot of people have also speculated that Amazon would become kind of a competitor or a player versus you know in theory they could take over – . Here’s a crazy idea but why not take over the post office. I mean because nothing- . I mean what what do you get in the mail any more besides Amazon products.

 

TONY: [00:06:23] It’s just my bills.

 

MATT: [00:06:24] And really most of those for me come digitally if I can. So what are you getting oh oh stuff from the government and college with for kids in college or coming to college into coming. Guess what I get a ton of huge marketing- oh my god. No wonder college costs so much because of all these huge marketing brochures that I get for all these colleges.

 

TONY: [00:06:47] I’d say mine’s a split between probably junk mail, credit card offers, and letters from Grandmom.

 

MATT: [00:06:55] There you go. So Grandmom is still writing letters do you write her back?

 

TONY: [00:06:58] No.

 

MATT: [00:06:58] Come on Tony.

 

TONY: [00:06:59] We call her back.

 

MATT: [00:07:01] Write your grandmother she love to receive a letter from you please.

 

TONY: [00:07:05] My head is hung in shame.

 

MATT: [00:07:07] So let’s talk about some of these other companies that the home. Audible again we talked about twitch.

 

TONY: [00:07:13] Twitch, that is interesting.

 

MATT: [00:07:14] Twitch’s is a video game rental service is that basically what it is?

 

TONY: [00:07:20] It’s like a streaming, kind of like, social media.

 

[00:07:24] You play a video game but anyone can get on and watch you. Yeah and talk when you play. And that’s as far as I know.

 

MATT: [00:07:31] So it’s a gamer platform but he basically.

 

TONY: [00:07:34] But people are making a lot of money off of it.

 

MATT: [00:07:35] Really?

 

TONY: [00:07:35] Yeah.

 

MATT: [00:07:36] Well I saw today speaking this is diverting a little bit of what I saw today that, I think ESPN or e-sports was going to put you know they’re going to start giving salaries to these guys like $50000 to play you know to be kind of on these teams.

 

TONY: [00:07:52] Yeah know a guy kind of met through snapchat actually going back to our earlier podcast, about snapchat, one of the guys they met on their news coverage for the Wall Street Journal for their e-sports business and they are definitely pumping money into the Vegas Consumer Electronics Show and they are doing all kinds of e-sports stuff.

 

MATT: [00:08:11] It makes sense like my kids like it was funny like I don’t play these games are so advanced they’re so over my head. I sit down my boys last night were watching or they were playing NBA 2K17 and I walked in and I went wait is basketball season back on? That looks so real. I’m just like oh my gosh. And then they you know they can select their music. They can insert their face on a map you know on some mongoloid. That’s twice as big as twice as big as a Lebron and they’re dunking over LeBron. And I’m like oh my gosh like it’s so creative and so funny. But but the other companies they own Did you know they own iMDB. You use every day.

 

TONY: [00:08:59] I did not know that.

 

MATT: [00:09:00] Did you know they own Twilio.

 

TONY: [00:09:02] No.

 

MATT: [00:09:03] That’s another social platform. Did you know that own songso. I did not.

 

TONY: [00:09:07] I had not heard of songso.

 

MATT: [00:09:09] Did you know that Goodreads. Which makes sense right. Is part of and then LivingSocial these are a couple other platforms and then you know Bezos on his own. Has invested in Twitter and Workday which you know is a sales force company that was rolled under since as far as I know. you’ve got a number of companies that he has invested in. And then when you start just looking at the you know the the acquisitions I mean they paid almost a billion for twitch. There’s a couple of elements only that play to half a billion and Alexa something like 250 million and what they’ve gotten out of these purchases. Woot they own Woot.

 

TONY: [00:09:51] Yeah.

 

MATT: [00:09:52] Yeah. I use that word for things in the late 90s that was like the first like discount Web provider.

 

TONY: [00:09:59] One item one day fire sale.

 

MATT: [00:10:02] Stuff I didn’t need that I would totally compulsively buy it. It’s just crazy. So but I guess what I want to say is really doesn’t matter if Bezos is the richest man or you know does that translate into success. Well on some level it does obviously it’s interesting the guy was a very successful investment banker he worked. I believe that Merrill Lynch for a decade and then he quit a very good lucrative couple of million dollar a year M&A position because he really felt strongly about selling books. I wonder if he could move. Yeah I wonder if you go back and look at his notes if he ever had thoughts that he would actually you have from beyond books if you had a you know there’s all kind of laid out or how it evolved because it’s got to look much different today which is probably 20 years after he started. But it’s pretty amazing because I know people used to complain oh yeah they’re selling a lot but they’re not making any money just that full circle thing.

 

TONY: [00:11:04] I don’t know if this is happening but I’ve heard he’s opened up brick and mortar bookstores again.

 

MATT: [00:11:09] Well but it makes sense because people still want to go. And you know, read a little bit touched a little bit and that’s just as going to encourage you to order things anyways.

 

TONY: [00:11:19] Well if you’ve heard this new phenomenon being called showrooming where you go to the store you check out everything the product in your hand and then you order there in the store online for cheaper. Right. And if there is Bezos store they just take a picture of it and prime sends it out.

 

MATT: [00:11:35] To your hub or to your door which is cool. I wonder if they’ll get into like travel services and mortgage services things like that. I mean total that have huge potential to disrupt still. You know there’s still a lot of things that they did with their prime services and really the whole prime deal is amazing and they don’t release those numbers so you have to kind of guess. But I mean if you had a couple of hundred million customers using prime and I don’t I’m not suggesting that it’s that large. But again it’s almost like the Costco model whereas they make most of their money from the actual subscription of that. So by adding on the movies and adding on all these things because nobody has the time.

 

TONY: [00:12:18] And that why they can do the retail for their rock bottom prices.

 

MATT: [00:12:21] Right because nobody has the time ultimately to use their photo services their video. You know you can watch movies get there get them they have prime music just like Spotify. Yeah like they have all these services but there’s no way everybody’s going to use it. So the cafeteria style pricing is attractive because it gets me to buy and get the free shipping and I get to use all the perks or whatever perks you know. But there’s no doubt I’m not using my money’s worth. And so they’re profiting from all these people using that. So I think it can continue. Listen I want to ask you one more question then what kind of rest on the subject all Amazon. This isn’t necessarily a buy or sell although I was short Amazon on Thursday into the earnings when it opened when everybody and their mother was touting you know Bezos as the richest man. And earnings were coming out at the close I got short that’s the type of place that I’d like to get short because when the masses are all on board everybody at that point when the press is the last one to tell you it’s the top. I mean it happens over and over again whether it’s a magazine cover whether it’s everybody trending on and on Twitter. It’s going to be the max pain or the max low or the max high.

 

TONY: [00:13:42] Yeah.

 

MATT: [00:13:42] So this is the one thing that I want to say about bring this up is that when you have everybody kind of loaded on the boat the same way there’s a good opportunity usually short term to take advantage of that and sure enough I mean Amazon went from what was high. I think the high was like 10 almost 25 down all the way to a thousand. So it dropped 70 percent which was pretty much that whole move that it had prior to the earnings. Right. So we’re back to this game where everybody is so euphoric and every earnings is good until the earnings right next week we have Apple coming out. Speaking of the biggest companies in the world Apple is still the largest profit company profitable company in the world. To date are printing something like 40 billion a year net profits and that’ll be the last of the tech earnings. And I want to ask you before I give you mine. Who’s going to be the next richest man after you know Bezos had his limited time?

 

TONY: [00:14:52] Just to BPC it can be the richest human being tax man.

 

MATT: [00:15:01] Man woman or child.

 

TONY: [00:15:02] Zuckerberg or did he ever hit that point?

 

[00:15:04] I think he’s in the top 10 right now. So it’s a good possibility. I’m going to go with.

 

[00:15:08] My money’s on him.

 

[00:15:10] Yeah that’s a good one. And I’m going to go with Elon Musk because if you come and really my reasoning is more of the private companies like Space X. I saw Space X is now as a largest space company out there. It’s bigger. It’s bigger than NASA.

 

[00:15:26] Efficient too.

 

[00:15:27] Yes. It’s worth something like $30 billion already. And you know forget about his piece in PayPal forget about his piece and you know Tesla his new company what’s it called the Elevator where they’re building the underground ground transport systems. So the most efficient to transport engines are pretty interesting. So he’s already there. They’ve already come out and showed up you know a hydraulic elevator that takes the car down so that only you know how I want to see how you’re going to dig all this and actually do it because I mean elevators have been around for a long time. Elan I want to see how you transport your electric vehicle via these tubes. That’s going to be fascinating.

 

[00:16:12] We’ll see over the next person as well. You know we’ll have a friendly lunch wager.

 

[00:16:20] I like Zuck he’s got the marketing logistics he’s leading AR right now.

 

[00:16:25] Well it it’s so interesting AR.

 

[00:16:27] There’s a little verbal battle going on between Elan and Zuck about AR. I don’t know if you’ve got to know or AI and VR. Basically they’ve been saying that you know Musk is saying you know Zuckerberg saying this Musk doesn’t you know if he’s over exaggerating the AI and and Musk is saying he doesn’t understand too much about it. So that’s the that’s the gist of it will be interesting to watch because their both.

 

[00:16:59] One’s playing coy.

 

[00:17:00] But they’re both in this space so it makes a lot of sense anyway.

 

[00:17:04] Hope everybody had a great trading week. Again send us your questions ( [email protected] )and please like us on Stitcher iTunes if you’re listening on Soundcloud. Help those folks out and help them to exist if you do like listening to it on Soundcloud. And we look forward to continuing our series and hopefully some education for you on the One Minute Trader Podcast.

 

[00:17:42] The One Minute Trader was devolved to bring you fresh trade ideas every day of every trading week. Make sure you sign up for and are invaluable one minute trader daily emails along with our five minute video emails to get timely insights into evolving trade possibilities. Let one minute trader beers second set of eyes for trade opportunities that may have passed you by. We appreciate you listening today to the podcast and we hope you’ll support the show by leaving us positive ratings on whichever platform you’re tuning in from. I’m Matt Davio and this is the One Minute Trader Podcast.


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