I'm thinking about adding a bearish position to my portfolio. Although I think that Amazon is a great company they are looking like a prime target, with their P/E ratio now eclipsing 50. Is it 2009 or 1999?
However, by that logic it made sense to short AMZN when the P/E was at 40, which is exactly what Marc Krieger did and he is finding himself in quite a bind with AMZN hitting $80.
- Short Opportunity for Amazon - January 4, 2009
- Amazon's Rich Valuation Defies Logic - March 9, 2009
- Amazon: Dirty Little Secrets Persist - April 8, 2009
It will be interesting to see how his short position ends. Those are some great reads with the hindsight the chart below gives you.
Looking at the yearly chart it is amazing how much the stock ground the stock has covered since last fall. And what a clear trend, it's like a chain e-mail went out to sell last August, and then in November a buy chain e-mail went out.
There is no telling how high Amazon will climb, but I am fairly sure that however high it goes it won't just stay up there. I will be watching the 5 - 20 day moving average closely and looking for signs that a new e-mail went out.
There is no telling how high Amazon will climb, but I am fairly sure that however high it goes it won't just stay up there. I will be watching the 5 - 20 day moving average closely and looking for signs that a new e-mail went out.
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