What I know now is that every company has a lifespan. But today that 90% drop in 2000 is like a little squiggle that you don't even notice anymore.ĪMZN data by YCharts Young companies are often unprofitable Now that's a discount, shoppers! And it took some time to come back. Now, Amazon stock did crash in 2000, and that wasn't the only time. And I'd share that with everybody and people would get excited. The store's getting bigger! The store's getting bigger! And I would work the Google - this was back when Alphabet was called Google - and I discovered how big the market was for music. And then Amazon started selling music, and I was jumping up and down with excitement. Yes, it's dangerous investing in companies that aren't making money (yet). What they didn't mention was how much fun it was. A Barron's cover story called the company 'Amazon.Bomb.' All the smart money was telling me how awful it was, how stupid it was, how dangerous it was. Now, this was a very dangerous thing to do. Finally I said the heck with itĪfter a time, I listened to that voice and bought some shares of Amazon. Stupid little math that doesn't help me at all. Maybe P/E ratio sucks.' After a while I just wanted to smack the P/E ratio in the face. So you don't have a P/E ratio! And I had a little voice in the back of my head: 'Maybe the books are wrong. All the investing books were talking about the P/E ratio. What was really annoying was that Amazon didn't have a P/E ratio. So I bought shares of Sealed Air ( NYSE:SEE) instead.Īmazon is not profitable! They're not making any money! That's how you lose money, by investing in companies that don't make money! They were unprofitable, and that was bad. And David Gardner and Jeff Fischer were talking about internet commerce and how cool it was, and how Amazon was 'top dog and first mover' and it was very, very exciting. I mean, the darn stock was going up every day. Meanwhile, ( NASDAQ:AMZN) was going crazy. All the investing books were talking about the price-to-earnings (P/E) ratio, so I was very concerned about my P/E ratios. I wanted to invest in stocks that were making money, and I wanted to avoid stocks that were losing money. I thought profitable companies were good, and unprofitable companies were bad. When I first started investing (this was back in the 20th century), I had a very simplistic notion of the stock market. He's the author of a line of murder mysteries, including Whodidit in the Supreme Court? and Whodidit With a Senator? The majority of what he knows about stocks he learned right here at the Motley Fool. Taylor Carmichael is a former attorney and filmmaker.

Internet money gross beat bank