Amazon Bubble Has Only Slightly Deflated

Amazon stock price has come down from it is ridiculous levels since we have mentioned it. It is down around 15%, but that is not nearly enough in terms of valuation. Of course you might want to be careful of a bounce given the market being down a few days in a row and we are still in the complacent go-go stages and this stock is loved by a bunch of momentum investors who are not necessarily investors or plain just don't know what they are doing if they think they are buying a good value. I have no argument this is a great company. I use it all the time myself, but as mentioned in Wall Street Meat by Andy Kessler in his book, Amazon is not much different than the milk company with huge sales, but razor thin margins, which will not change. Margins will not change because their business model depends on volumes and to bring volumes in they have to sell things cheaper than competitors, aka low margins. This is the same thing (again as mentioned in the aforementioned book) that happened to buy.com. Amazon will be a great company, but do not expect huge margins going forward either. Also, as nice as Kindle might be -which I am not a big fan of nor use one- it will not be the next iPod or make Amazon the next Apple -which, too, is way overvalued by the way. And yes, Apple, too, is a great company, just not a good stock.