In 2018, former Amazon.com Inc. Founder and CEO Jeff Bezos expressed a distinctive view on stock market dynamics and company growth. Despite Amazon’s fluctuating stock prices, Bezos insisted, “I don't spend any time thinking about the daily stock price; I don't.”
He elaborated on his philosophy during an interview at the Economic Club of Washington, D.C., saying, “At almost every all-hands meeting I say: ‘Look, when the stock is up 30% in a month, don't feel 30% smarter. Because when the stock is down 30% in a month, it's not going to feel so good to feel 30% dumber.'"
This approach reflects his broader perspective: “The stock is not the company, and the company is not the stock.”
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Despite the volatile nature of the stock market, Bezos remained focused on Amazon’s core business metrics and customer engagement strategies.
In a significant milestone, Amazon achieved a market cap of over $1 trillion on Sept. 4, 2018, joining Apple Inc. as one of the few publicly traded U.S. companies to reach this level. This success was attributed to Amazon’s diverse portfolio and innovative business strategies. Bezos emphasized the importance of a company’s fundamentals — its business model, leadership and market position — over short-term stock performance.
Bezos’s journey with Amazon started in 1994, inspired by the rapid growth of the internet. With an initial investment of $245,573 from his parents, Amazon evolved from a garage startup to a multinational corporation now worth $1.6 trillion. The company’s growth is attributed to its innovative business model and expansion into logistics, consumer technology, cloud computing and media and entertainment as well as the internet.
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As of December, Bezos’s shares in Amazon are valued at about $144.9 billion. In the last five years, Amazon’s revenue increased by 121%, from $232 billion in 2018 to $514 billion in 2022, with a significant contribution from its AWS business segment. The company’s growth is driven by expanding services to more markets and enhancing its e-commerce business model. Despite this, Amazon experienced a net loss of $2.7 billion in 2022, underscoring the dichotomy between its significant market cap and profitability.
Bezos’s insights offer valuable lessons for investors and entrepreneurs alike. His focus on the underlying fundamentals of a company rather than fleeting market trends highlights the importance of deep understanding and long-term strategy in business decisions.
This philosophy is particularly relevant in the context of investing in startups and emerging technologies. These sectors provide opportunities for individuals to become early investors in innovative ventures, often before they are publicly traded. This early-stage investment can be a gateway to significant future returns, especially if the startup’s innovative potential is fully realized.
The key to success lies in carefully evaluating a company’s vision, leadership and market potential. Ground-level investment in startups allows investors to contribute to the growth of new technologies and business models and potentially benefit from the company’s success as it matures. This strategy requires a keen eye for potential and a willingness to embrace the risks associated with early-stage investments.
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This article Jeff Bezos Says He Doesn't Think About Amazon's Daily Stock Price — 'When The Stock Is Down 30% In A Month, It's Not Going To Feel So Good To Feel 30% Dumber.' originally appeared on Benzinga.com
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