History: Amazon Journey

February 13, 2024, 10:19 am EST

Amazon Journey

Sometimes, it is interesting to look back at history. Sometimes, we could learn useful lessons that we can apply to today. 

Let’s use Amazon (AMZN) as an example since most living human being in this earth knows and use this its service through online shopping. 

The featured chart of AMZN presents its price performance from 50 cents to 5 dollars (10x) and then back to the same level during 1999 and 2021. It was about 25 years ago when the internet and e-commerce boom-burst cycle occurred. Not only AMZN experienced such a wild action, the entire stock markets, especially Nasdaq participated in it as well. It lost about -78% from its peak value. 

So, what are lessons we can learn:

  1. It is almost impossible to predict the exact top. Notice AMZN made 2 or 3 tops in this process. 
  2. Gap-ups, gap-downs, v-shape, reversal appeared everywhere
  3. If you pulled out the news at that time, it was full of excitement, “The Future of Shopping”, record earnings and sales, and blah blah.
  4. Be careful and prepared for landing from the sky

AMZN is still here but some companies have already disappeared in this process. Nowadays, Cryptocurrency and AI are the keywords to describe this phenomenon. Ten years ago, there were cloud computing, social networks, virtual reality, etc. 

If you want to be a winner over a long period of time in investing, then it is important to stay calm and make right choices along the way. It could be attempted to assume ourselves are smart enough to ride the way up, or way down, or both so we can get rich quick. However, these kinds of investors or traders almost do not exist in the real world. The majority of market participants are trapped in the top or dumped at the bottom. 

Hopefully, we can stay in the stock market enough and get returns that we deserve. It is good enough. 

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