Investors bearish on the long-term prospects of one of the world's most influential companies have lost a lot of money betting on the eventual reversion toward the mean for companies such as Amazon.com, Inc. (NASDAQ:AMZN).
With the technology giant's stock price declining approximately $100 from its peak just a few days ago (only representing a drop of just over 9%), the market is largely digesting whether this downward move is indicative of the beginning of a protracted slide or an opportunity to buy on the dip.
Certainly, investors who have continued to buy Amazon shares on the way up have done incredibly well, with Amazon's share price largely following its revenue growth trend higher each quarter. Now one of the largest employers in the U.S., indications are that other factors may now be at play which would help provide a floor for investors considering purchasing Amazon shares at current levels. Today marks the company's annual job day in which Amazon is expected to hire 50,000 employees across the U.S.
Such impressive employment numbers, combined with world-class automation and transportation/distribution efficiencies, have turned Amazon into the company of choice for investors considering a bet on the U.S. economy.
With the Trump trade dying down recently, the slide for Amazon may continue for some time. My take is that Amazon's size essentially now makes it a proxy for broader economic consumption within the U.S. (and somewhat globally). Should a repeat of '07/'08 take place again, investors may feel the pain much more holding a stock such as Amazon than other defensive names.
Invest wisely, my friends.
