By VWArticles. Originally published at ValueWalk.
Schechter Wealth
H/T @pradeeepk
Published on Dec 21, 2017
The full-video from Schechter’s event with famed short-seller Jim Chanos and Quicken Loans founder Dan Gilbert at The M@dison in downtown Detroit on December 13, 2017.
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About Schechter:
Schechter is a boutique, third-generation wealth advisory and financial services firm. For over 75 years, our multi-disciplined team consisting of JDs, CPAs, LLMs, CLUs, PFSs, CAPs, MBAs, CFA® charterholders, CFP® practitioners and CIMA® consultants have been quietly advising wealthy families on financial matters including: Institutional quality investment advisory services, alternative investments, advanced life insurance planning, income and estate taxes, business succession and charitable planning.
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I always used to say you know grumbling breath there there was no next McDonald’s and nowadays when you get confronted with a sort of questionable the business model I got like a Tesla or whatever we can sort of model out it just doesn’t work right their car company loses money someone say yeah but you could have said that about Amazon right I get that all the time and so I decided to look back at Amazon I remembered it from late 90s but I went back and recently just at a deep dive into the history financial history of Amazon and what I found was the following Amazon went public in 1997 their last public offering was in 2001
they’ve been free cash flow positive every single year since 2001 but the really intriguing thing was until 2012 when they got into the AWS though basically the cloud they had no capital in their business quite literally we financed them through their retail model that if you bought
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Tesla which is capital intensive tons ofdebt raises stock and bond offerings every three to six months to mars whatever and and and by the way B sauce is – interestingly enough he’s got his own rocket company so it was a unique animal and and same with Apple people you guys sent that mount a pole well no Apple has 40% gross margins in the consumer products business you know and and and Tesla’s gross margins or 18% and
so you know down the line and the problem is a lot of these statements don’t hold up when you actually go back and analyze that and understand what made Amazon unique you realize it was unique and that for everyone to say I’m going to justify any valuation sixty billion dollars in Tesla or whatever it might be because it’s the next Amazon
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