Random Thoughts About Wall Street: Amazon vs. FedEx, Shopify and the Wealth Creation Journey
Are we about to see the next multi-billion dollar Amazon business emerge in the next few years? Morgan Stanley recently published a report about how Amazon is a major threat to UPS and FedEx. The report cites how Amazon now delivers 46% of U.S. packages bought on its e-commerce platform thru their internal delivery arm Amazon Logistics. Last year Amazon was delivering only 20% of its own packages. With the delivery and logistics infrastructure Amazon is building to drive internal efficiencies, you can see how they could easily make this available to paying customers. Much like how Amazon Web Services, now the most profitable business at Amazon, started as the internal IT infrastructure for running Amazon's e-commerce business, Amazon Logistics could be following a similar path...In other news, FedEx reported earnings last week that their own CFO described as 'horrific'. Profits were down 40% and pundits are now calling for last rights to be read to FedEx due to the Amazon threat...Never count out their legendary CEO Fred Smith who started FedEx as a result of a disagreement he had with his professor about the viability of the express delivery service business model...One of the more interesting predictions of how the FedEx story will end is the idea of a merger with Shopify. ..The Shopify stock continues to soar. It touched $400 USD last week, up from its IPO price of $17 USD. What an amazing Canadian tech success story and a real win for entrepreneurs...Speaking of Canadian tech success stories, Blackberry's recent strong quarter points to a greater likelihood of their ability to re-establish themselves as a Canadian tech darling.
Last week saw a flurry of news headlines that appear to have had major impact on the stock market. Following the evening of the impeachment vote on President Trump last week in Congress, markets jumped the next two consecutive days. Before a formal announcement, news broke that the US and China are very close to signing a phase one trade deal...I would not have predicted the markets reaction to the impeachment vote, or then again maybe these events are not so correlated... Either way, I'm glad I focus on company fundamentals with my investing choices.
The market has provided plenty of opportunity this year, the S&P is up approximately 25% year-to-date. In fact, it's not just 2019 that provided opportunity for investors, we are also closing the decade with the longest bull market run in history still intact. While the market can be kind to us and give us lots of opportunity, strong performance of our personal stock portfolio is not guaranteed. It takes hard work finding high potential stocks and doing the research, nerves of steel sometimes, emotion free decision making and learning from our past mistakes to not repeat bad judgement. Reflecting on 2019 and the lessons I've learned, I'm reminded of the different ways I can improve my wealth creation and investing knowledge. Just a few examples...books, investing clubs, Facebook investing groups and surrounding yourself with advisers, experts and mentors...The road to wealth is a journey that is fueled by learning. It takes time...While Warren Buffett is worth $87 billion today, it didn’t happen overnight. It took poor Warren till age 32 to become a millionaire, and then another 28 years to become a paper billionaire at age 60...Seems like a good place to end my reflections and look ahead to 2020.