Sometimes you read a piece in the paper and you say "hallelujah they de-risked the stock."
That's how I felt from the excellent piece in the Wall Street Journal entitled, "For Amazon, Pandemic Isn't All Prime Time."
This story had it all: 1. That Amazon (AMZN) was caught flat-footed by the pandemic by its own admission. I say, tell me who wasn't? 2. The company therefore had to take measures to curtail for non-essential goods. OK, we all pretty much rode the wave. Why? They were non-essential. 3. They ran out of toilet paper and hand sanitizer. Shocker, so did everyone else. 4. Some business has gone to competitors, because of these issues. Yeah, and the competitors weren't so hot and were often more expensive, except if you went to Costco (COST) , which the charitable trust, Action Alerts PLUS, owns, too, but, when it comes to necessary frustration over physical distancing the loss isn't all that much. Target (TGT) picked up some share and so has Walmart (WMT) , but my sources indicate that Amazon Web Services has picked up a big chunk of share because of the unreliability of other, less tested and seasoned web services.
Finally, there point No. 5: The article gives you a sense of the frustrations and problems Amazon workers have, and it alludes to a possible unionization effort.
You know what this terrific article has accomplished? It has neutered all the objections and concerns, the so-called hair, on the quarter so when Amazon reports this Thursday, we are fully warned about the issues that might plague what I think will be a blow-out quarter.
I think the article allows you to buy Amazon ahead of the quarter especially on the weakness we had Monday.
Netflix (NFLX) was not similarly vaccinated and it got bashed when it reported. An article like this would have gone far to make a holder feel better.
It's often hard to know where you stand ahead of a quarter. Last week Morgan Stanley's (MS) redoubtable Katy Huberty put out a terrific piece saying that the set-up for Apple (AAPL) couldn't be better. There are enough woes built in over near-term sales that you basically have had a reset that should support the stock after Thursday's report. Then, Monday we found out that the company's next iteration phone is going to be late. To me that means the stock's too high, as that's new information. That said, I want to own it, not trade it. Yet, we have to anticipate a number cut and there have been no recorded instances I have seem of number cuts not hurting stocks since this earnings period began.
The most vulnerable might be my favorite, Microsoft (MSFT) , which reports on Wednesday. I don't know a soul who expects anything less than perfection for Microsoft, including, well, me. But it is certainly priced for that and if you don't own it ahead you can buy a little, but leave room for someone who doesn't like something because it's just too darned positive.
Finally, remember tomorrow is another day. Like the tomorrow after IBM (IBM) reported and the stock got down to $116, hit hard by a so-called bad quarter. I was aghast, because no one expected everything to be perfect, especially on the software side, but there were enough upside surprises within divisions, especially the all-important Red Hat, and there was enough protection of the dividend with huge cash flow that this evolved into one of the few no-brainers of the era. The stock's up $10 from its report a week ago.
So remember, you simply cannot grade a stock in this era by the first move, and you certainly should consider that the stock can be plain wrong vs. the fundamentals, especially when all your worries, like Amazon, are both warned and assuaged at the same time.