Bubble in the Amazon

Amazon is a great company that I personally love using, but similar to a lot of Wall Street love stories, this one makes no sense in terms of valuation either. Its earnings and expected earnings growth are very unrealistic as they have been in 2007 and many times before, but times seemed to be good for the stockmarkets and Wall Street and this is one of the loved names. Similar to other retail names it is hard to short a momentum stock especially one touted repeatedly. Times are similar now to 2007. Market is in bubble territory and bad news are ignored or are spinned to be good news in the most ridiculous way imaginable. It can only end one way. It could start any time or last another year or two, but how much more this stock can go is probably not more than up another 20% or so, but the downside is much bigger. All the same is true for Priceline, too. Wall Street Love Stories always end bad, and so will these. The fundamentals make no sense. You just have to give yourself enough time and not get run over by the continuation of the frenzy. Out of the money put options is a good way to go with these names. Just give yourself enough time and you will see these stocks down more than 50%.