The term “GOAT” — greatest of all time — is rarely bandied about. Reserved only for the true elites of a particular discipline, no pundit dares impugns its meaning. This is a category reserved only for the likes of Muhammad Ali, Michael Jordan, and most recently, Tom Brady. In the world of high finance, it’s not much of a stretch, though, to say that Amazon.com, Inc. (NASDAQ:AMZN) is a “GOAT stock.”
Think of how much AMZN stock has impacted the markets.
The company couldn’t have started off on a more humble note. AMZN CEO Jeff Bezos set up operations in the garage of his Bellevue, Washington home. For business meetings and contract negotiations, Bezos used a local Barnes & Noble, Inc. (NYSE:BKS) store. He had given up a very cushy Wall Street job to branch out in the bookselling business. His colleagues must have thought he was terminally insane.
Of course, Bezos had the last laugh — and he’s still laughing. AMZN stock first closed on an adjusted basis of $1.96. Today, shares trade hands at over $900. If you’re counting, that’s nearly a 46,000% return on investment. There are companies that are worth more than Amazon stock. Certainly, multiple firms have better growth prospects.
Nevertheless, AMZN stock is in consideration for GOAT status because it proves that the U.S. is still the greatest nation on earth.
Is AMZN Stock Too Perfect?
Some folks might agree patriotically, but disagree economically. They look to places like India or China as the “next big opportunity.” China bulls like the legendary Jim Rogers come to mind, although now he is a strong proponent of Russian stocks. Apparently with celebrity contrarians, the goal is to shock, not necessarily to profit.
In contrast, the U.S. is the perfect spouse — kind, dutiful, responsible and invariably boring. Ironically, what we seek is what we despise when we find it. A similar dynamic affects AMZN stock and its relationship with American investors. Many are interested in Alibaba Group Holding Ltd (NYSE:BABA) because it’s so exotic and so Chinese. But why take a risk on a foreign market when Amazon stock is doing just fine right here at home?
Remember, people say that BABA is the Amazon stock of China. They do not say that AMZN is the Alibaba stock of America. They never will. I don’t care how many Chinese consumers exist. At the end of the day, the U.S. has the best infrastructure in the world. The only way China or Russia or any country could surpass us is if they nuke us.
We Already Have the Greener Grass
AMZN stock makes that point abundantly clear.
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That’s a major tailwind for Amazon stock, as e-commerce is taking a greater share of the national retail pot.
You can’t say the same thing about the Chinese consumer market. Yes, they have more households, but they are definitely not making our kind of money. China is four times the size of the U.S.; at the very least, they need four times the GDP before Mr. Rogers’ ultimate fantasy becomes reality.
As the old saying goes, it’s not the size of the dog in the fight; it’s the size of the fight in the dog.
Another bullish factor for AMZN stock that often goes ignored is the beauty of our tax system. The U.S. tax system is unique in that it rewards those who drive our economy. Conversely, it punishes those who hoard money to themselves.
The Section 179 deduction is a perfect example. Under this tax code, small businesses can deduct the entire cost of qualified assets in the year they were purchased. The idea is to encourage companies to stimulate the economy, rather than a government bureaucracy. Since small businesses are growing under the Trump administration, Amazon stock will inevitably benefit.
While it’s very trendy to look to foreign markets, it’s hard to replace the best. The same sentiment applies to AMZN stock. The “next Amazon” is Amazon. Sometimes, the greener grass is the one you’re already standing on.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.
