I must say that the list of stocks that I’m never going to sell is very brief. Probably the other one may be Amazon.com (NASDAQ: AMZN). Any company is trying to expand. If, or until, the plateau and revenue growth prospects begin to stagnate, they tend to focus on maximising current sales and replenishing capital by dividends and/or shareholder repurchases. This is usually a rational decision, since there are few choices for capital investment in their own companies.
When a company grows on an annual basis at the detriment of current earnings, re-investing virtually half of its resources, it’s a brand new ball game. In its 1997 letter to shareholders, Amazon’s founder and CEO Jeff Bezos wrote, “If we manage to maximise existing valuation from future cash flows and optimise our appearance of GAAP, we’re going to have cash flows.”
Being willing to exchange short-term gains for investment … Read More