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Weekend reading: Amazed at Amazon

What caught my eye this week.

People seem very confused about Amazon [1]. This week I heard some market pundits chortling among themselves about how crazy high the valuation was for a company that “doesn’t make any money.”

Ho ho ho! In fact they only stopped laughing to say Amazon really must be regulated because it’s grown so vast and so powerful that it’s becoming a monopoly.

Um, hang on a minute…?

The company hasn’t raised external capital for decades and supposedly doesn’t make any money – yet it’s still managed to grow so big that it ought to be regulated away or even broken up?

And the company is obviously over-valued, except it’s also a monopoly that crushes all competition and only governments can stop it? (What price would you put on that sort of market dominance?)

I’m an Amazon shareholder, and have been for years. If you know of any other ‘obviously over-valued’ $700bn companies that grew that way in barely 20 years and that are so laughably bad at making money that ardent capitalists are calling for changes to the competition laws in the US to enable regulatory intervention, please do shout – I might like to invest in those, too.

Consumers seem similarly confused.

I know people who say they boycott Amazon because “it doesn’t pay any taxes”.

Firstly, why should it if it “doesn’t make any money”?

Secondly, Amazon – and the general shift to online sales – has helped keep a lid on inflation since the 1990s, and has crushed the cost of almost everything tangible, everywhere.

Why are people who are disdainful of city fund managers taking a 0.5% fee managing money so nostalgic about High Street giants where the business model might be to mark up tat up by 100% or more?

People are funny.

Our disposable incomes stretch far further these days, partly due to the relentless deflationary impact of online retail. I wouldn’t be surprised if the typical UK household is several thousand pounds a year better off compared to if the Internet had somehow never been invented.

Do you think you’d get thousands of pounds a year of extra value in your life if Amazon paid more taxes?

I have my doubts. I’d rather have the pounds in my pocket.

From Monevator

Why are we surprised when early retirees have second thoughts? – Monevator [2]

The comment thread from Monevator readers on that article is from the top drawer – Monevator [3]

From the archive-ator: Reasons to rent a house instead of buying – Monevator [4]


Note: Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber.1 [5]

London house prices falling at fastest rate for nine years, says Halifax – Guardian [6]

Treasury ramps up the pressure on contractors’ tax [Search result]FT [7]

First drop in disposable income in six years as inflation bites – ThisIsMoney [8]

We crush stock indexes, Yale fund claims – Institutional Investor [9]

Construction growth in UK build-to-rent properties [Search result]FT [10]

UK dividends look unsustainable, investors warned – Hargreaves Lansdown [11]


Bitcoin’s price crash started when professionals got the ability to short it – A Wealth Of Common Sense [13]

Products and services

Fidelity fires broadside in battle to cut tracker fund fees [Search result]FT [14]

Post Office’s new family link mortgage enables you to buy with no deposit – ThisIsMoney [15]

Is it time to take a contrarian view on cryptocurrencies? [Search result]FT [16]

New app Glint lets you use gold to buy breakfast via a credit card – ThisIsMoney [17]

Can you ‘barge’ your way on to the house ladder? [Search result, about boats]FT [18]

Avios air miles scheme to close: What you need to know – ThisIsMoney [19]

Comment and opinion

How many ISA millionaires are out there? – Fire V London [20]

Too much in stocks – not bonds – is the risk to watch for – The Irrelevant Investor [21]

The ideal age to retire to minimize regret and maximize happiness – Financial Samurai [22]

A penny saved is two pennies earned – Elm Funds [23]

A would-be early retiree finds new motivation in fresh nonsense at work – My Deliberate Life [24]

Leaving a high-paying prestigious career in your 40s [US detail, but relevant]Can I Retire Yet? [25]

Death and taxes – 3652 Days [26]

Building a predictably successful business [Podcast]Motley Fool [27]

Hacking hedonic adaption to get way more for your money – Mr Money Mustache [28]

These ain’t yo mamas frugality tips – The Escape Artist [29]

Why we don’t give each other gifts – Young FI Guy [30]

Four high growth dividend champions [PDF]John Kingham [31]

An interview with market historian Elroy Dimson [Podcast]Meb Faber [32]

Six ways that fund managers can cut their overheads – The Evidence-based Investor [33]

Come easy, go easy: The tech takedown – Musings on Markets [34]

Facebook’s salutary lesson on being ‘priced for perfection’ – The Value Perspective [35]

Kindle book bargains

The Millionaire Next Door by Thomas J. Stanley Ph.D.– £0.99 on Kindle [36]

ReWork: Change the Way You Work Forever by David Fried – £0.99 on Kindle [37]

The Health Gap: The Challenge of an Unequal World by Michael Marmot – £3.99 on Kindle [38]

Side Hustle: Build a Side Business and Make Extra Money – Without Quitting Your Day Job by Chris Guillebeau – £0.99 on Kindle [39]

Off our beat

A Remainer tries to understand the case for Brexit – Simple Living in Somerset [40]

Travel is no cure for the mind – More To That [41]

“Quitting corporate life for the start-up dream f*cked my life up”Medium [42]

Business lessons from The Profit TV show [One of my favourites]Marginal Revolution [43]

And finally…

“If you get good returns in the first decade of retirement, you’re unlikely to run out of money, as long as you use a sensible withdrawal rate. If you get poor or even mediocre returns in the first decade of retirement, then technically speaking, you’re buggered!”
– Abraham Okusanya, Beyond the 4% Rule [44]

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  1. Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [ [48]]