Amazon and Apple: Something smells fishy

“The stock market is a rigged game that preys on the innocent and enriches the lives of the already rich,” Kate MacKenzie writes for Mac360. “There, I said it.”

“You would think that a company that is well run, profitable and growing, and which has customers standing in line to buy products would be in favor on Wall Street,” MacKenzie writes. “Instead, the market seems to reward companies for taking risks, working toward the future, which seems to be a euphemism for failing to make a profit.”

MacKenzie writes, “Two perfect examples are Apple and Amazon. The latter is a money-losing machine which grows revenue, but can’t figure out how to make a profit. The former is a money-making machine with more legs on the profit stool than anything from Ethan Allen… Amazon just lost another ton of money, although revenue went up, and the market responded by pushing the company’s stock to record levels.”

Read more in the full article here.


    1. Here’s the answer as I see it. The FTC, like all other regulatory agencies, is in the back pocket of the industry it is supposed to regulate. But I think it’s the SEC that would probably be charged with the task of investigating the stock market.

      1. You think that Obama has corrupted Wall Street? You think he is personally responsible for whatever abuses go on there? The SEC was created by, and is overseen by, Congress not the White House. If you really want to hold the current government responsible for the corrupt system (which is a totally ludicrous proposition given how long this stuff has been going on), blame the GOP controlled House.

  1. And this is precisely why no one should reference stock price and performance when discussing a company’s health. It is essentially irrelevant.

    The vast majority of people think Wall Street wants to invedt in companies which succeed. The reality is Wall Street can make money on all kinds of stock, it just needs to be able to predict which direction the stock will move. It doesn’t care if a company lives or dies, because another will take its place.

    1. Absolutely true! And they willingly calculate/neglect the risks of a crash! It would essentially mean nothing more than when the crash comes the common man having to save and foresake and blackmailing the state to chip in hard earned tax money “to save the financial sector”.

    2. Exactly so.

      Wall Street (and the rest of the stock houses around the world) are nothing more than legal gambling establishments — only worse. You are gambling on what the other gamblers will do. That’s all there is to it.

      There is an *extremely* loose coupling between the “market value” of a company based upon its stock and the actual value of the company. There’s a specific line in GAAP accounting to take into account the difference. If every company were to be valued at *exactly* its book value, Wall Street would be radically different than it is today.

      The problem is that since the 80s the coupling between the company’s true value and its market value has become more and more and more decoupled. Its 99.9999% about perception and 0.0001% about actual results.

      The soothsayers claim that a company like Amazon has a great future, just ignore the past and the present. Others bet on those soothsayers’ claims and the stock goes up (truly a self fulfilling prophesy). The soothsayers claim that Apple has stagnated with much less of a future, again just ignore the past or present. Others bet based upon the soothsayers’ claims — thus betting against Apple, or at the very least pulling their bets with the same results — and the stock goes down.

      With all the BS floating about Apple and how its best days are behind it, I would not be surprised if Apple posts the best financial fourth quarter ever and best financial year ever come this October — and for the stock to still go down!

      I hope this won’t happen, but given the insanity I won’t be surprised if it happens.

      Besides, Wall Street does not make much money off of people like me who direct our own portfolios and buy for the long term (holding some stocks for over 15 years). You can’t make much of a commission if there’s no churn! Buy/sell/buy/sell/buy/sell/buy/sell makes them money. Buy-hold-hold-hold-hold, does not. I’ve talked about the classic “lather/rinse/repeat” cycle of Wall Street here before. It is the way of Wall Street.

      For those who think massive investigations should be done — state *specifically* what you believe has been done illegally. (Bad ethics is not inherently illegal.) If you want tougher regulation of Wall Street (which might be a good thing) then state what *specific* laws you want past and how they are to be worded.

      It’s all well and good to complain, but if you want things to be different, then state the specifics of how you want them different!

  2. You can only make a profit if you sell products above your cost. If you sell one product at a loss and expect profit to come from services/products available you might be in trouble. But hey, in other news Amazon is hiring 5,000 warehouse workers.

    1. More importantly, it us being propped up by the institutions. There is probably all kinds if money tied up into leverage, essentially betting that Amazon will fill into it’s valuation. In having to prop up Amazon, investment must fall out of companies like Apple. In addition to Amazon, there are companies like Google that are tied deeply into the security state, so we have a Street-Military State alliance that a certain former treasury official was talking about the other day.

      Here we go:

      I wonder how long it’s been like this. At least since Bush, probably since the end of Carter, possibly from end of WWII (a la Eisenhower’s warning).

  3. This has nothing do with regulating the stock market or FTC. As the saying goes…”In the USA it is not against the law to be stupid”. While there are a lot of investment “experts” and financial advisors who will steer people into buying stock in companies based on “future potential growth”, no one is being forced to buy this stock. There are still true investors who analyze stock based on financial fundamentals and how profitable the company really is. Go read something from John Boggle or Benjamin Graham. Smart investors would buy Apple now because of its strong fundamentals, such a P/E 11.2% (ridiculously low). There is nothing wrong with the stock market, it is stupid lazy investors who believe they can get rich quick because some slick talking “financial advisor” plays on their greed. The government can’t fix people’s stupidity (the government has a lot of its own stupidity it should focus on first)

    1. While there are a lot of investment “experts” and financial advisors who will steer people into buying stock in companies based on “future potential growth”,

      You could shorten that to “While there are a lot of predators”. At one time the information imbalance between the wolves and the sheep was recognized and some attempt was made to protect the sheep. Now the shepherds just seem to say “stupid sheep deserved it”.

  4. The stock market promotes stock with future growth potential. The price can be inflated because of the unknown element that may reap huge rewards.
    Therefore Amazon and Netflix are high rollers at the moment since they are growing but make little money.
    Companies like Apple are considered stable and are not expected to grow. Therefore the market will not promote them which will cause the stock to lose value.
    So although stocks are promoted because of their potential, once they realize that potential the stock value will plummet.
    A classic Catch22.
    There are 2 ways of winning. Either sell before the stock potential is realized or buy in early so that the stock growth is significantly greater even if it drops down again.

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