Amazon.com, Inc. (AMZN)

It’s riding high. Not a stock you want to short. A momentum stock. 100 times PE. Probably for other investors but not for his clients.

Web based consumer discretionary are doing the best of the sector. You buy their dominant position.

Believes that you buy the leader in an industry if you want to participate. In retail, the high growth area is web based retail. They are in hardware with their Kindle as well as cloud computing but their main business is retail. Compound annual growth rate over the last 5 years of 30% a year. Going forward it will grow at about the same rate. The big knock has been that they have spent money to become dominant and the risk is that they continue to spend too much money. Current estimates are that they earn $3 a share.

The growth of this company is 20%. Would not like to be in a business they go into. Management is just a machine here and have created what will be a global $100 billion company in the next 5 years. The PE is over 200.

He always looks for the leaders and the strongest ones in the group. Retail has been underperforming in many ways but the Internet retailers are doing particularly well and this is one of the strongest stocks in the group. The relative strength is stronger than 86% of stocks in the current market. Revenue growth has been very strong.

Reporting earnings tomorrow and it will probably be volatile. Very expensive trading at 21X EBITDA. Phenomenal business. Stealing trade from traditional businesses.

A bit too frothy. Has a P/E ratio that doesn’t even fit on his screen. Fantastic business and he loves dealing with the company and are a leader in their field but P/E ratio is very high. Not sure this is a reasonable price. If you own, it would make sense to take some profits.

Hit a brand-new high today so certainly the momentum is behind the stock. Extremely expensive at forward PE of 180 times. Growth rate is very strong at 30%-40%.

As a company, they are taking over the world. They are selling more and more goods. Having retailers online. Revenues are amazing. Incredible management team. However, the stock is trading at nosebleed valuation and has for a long time.

(Market Call Minute.) This is a company that continues to impress him. The only drawback is that right now retail sales, etc. Buy on a pull back.

(Market Call Minute.) Very expensive and no earnings support.

Value in this is not just the retail business now. It’s got the AWS web service where they are basically an infrastructure platform that is for sale across the web to people that want to put their applications out into the cloud and access them on demand. An incredible franchise that they have developed that is probably the lowest cost infrastructure of the service offering in the marketplace and is growing very rapidly. New services that they are offering to retailers probably means margins are going to be enhanced dramatically over the next 2-3 years. Extremely expensive on a trailing price to cash flow, Price to earnings number. Margin improvement will see earnings catch-up to the price over the next 2-3 years.

Outlook is good but it is an extremely over priced stock. High Multiple. Should be less than 1 for payout but is 4 times. If its growth rate and earnings come down, it could cut in half, literally. Reminds her of the tech bubble. The PE should be less than its growth rate.

This company remains the biggest mystery to him in the whole equity market. Great company, great earnings growth. They don’t have to reinvent themselves and bring out new products. Why it commands a 95X multiple of next year’s earnings is beyond him.

(Market Call Minute.) Transforming retail faster than anybody can know what will happen but the valuation just doesn't make any sense.