Revenue Growth and Timeline of Amazon

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Amazon(AMZN) is one of the survivors of the dot-com era and has recovered strongly in the past few years as one of the major online retailers. The stock price has appreciated substantially over differ periods:

  • 5-year return: 267%
  • 10-year return: 2526%
  • Since IPO return: 46993%

Note: Returns shown above are as of June 17, 2016

AMZN closed at $706 a share on Friday. At this price, the stock is incredibly expensive with a P/E ratio of 296. Despite this, analysts and investors have high expectations for further growth on many lines of its business units including the Amazon Web Services. Hence investors are bidding up the share price.

The chart below shows the 10-year return:

AMZN 10-Year return

Source: Yahoo Finance

Amazon has come a long way since its inception and its IPO in 1997. The following cool graphic from the Journal shows how diversified the online retailer is today:

Click to enlarge

How Amazon Diversified

 

Source: How Amazon Has Diversified, WSJ, June 1, 2016

Also see:

Disclosure: No Positions

China’s Stock Market Landscape: Infographic

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The Chinese equity market is the second largest in the world in terms of market capitalization. Despite the size and breadth of the market, the index provider MSCI recently decided to not add China’s domestic stocks (“A” stocks) to the MSCI Emerging Markets Index. From a recent journal article:

“International institutional investors clearly indicated that they would like to see further improvements in the accessibility of the China A shares market before its inclusion in the MSCI Emerging Markets Index,” said Remy Briand, global head of research at MSCI.

MSCI’s decision is a blow to Chinese authorities who have been eager to attract more foreign capital to their stock market. To win over MSCI, Chinese regulators recently stepped up their reform efforts, such as creating new rules that limit how long companies could suspend trading in their shares, and allowing foreign money management funds to take bigger stakes in the market.

The index provider welcomed those moves but said investors “stressed the need for a period of observation to assess the effectiveness” of these changes. Some investors raised concern that Beijing could impose new controls during the next market selloff.

MSCI said its decision to hold off also reflected continuing issues for foreign investors, such as provisions that prevented them from taking out more than 20% of their investment each month.

Source: MSCI Delays Adding China’s Local Currency shares to Emerging-Market Index, WSJ, June 14, 2016

Chinese stocks listed on the domestic market are known as A stocks. These are not accessible to international investors unlike the ones traded on Hong Kong and US markets. A stocks are denominated in yuan and only local investors are allowed to invest in them. Since the Chinese equity market is vast, investors can feel overwhelmed on where to start. The following infographic gives an overview of China’s equity market:

Click to enlarge

China Stock Market Landscape

Source: INFOGRAPHIC: Scoping China’s Equity Landscape, Context,  TheAB Blog on Investing

US investors can access many Chinese companies easily as their stocks trade on the US market. Currently about 112 firms are listed on the organized exchanges and 199 trade on the OTC markets.

Investors Still Have Unrealistic Income Expectations And Shorter Holding Periods: Infographic

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Many investors expect high income from their investments but hold their investments for shorter periods according to a study by Schroders. For example, investors want to generate an income of 9.1% while the average equity market yield is just 3.1%. Similarly in terms of holding periods, the average holding period is just 3.2 years much less than the period recommended by asset managers.

Click to enlarge

Global-investor-study-invesment-outcomes-Infographic

Source: GLOBAL INVESTOR STUDY: Investment outcomes – Infographic, Schroders

Generally though investors want high returns (both income and capital gains) from equities, their patience for holding them for many years is too low. For example, in the US the average turnover of stocks was an astonishing 307% last year and an investor held stocks for just 17 weeks.

Knowledge is Power: Brexit, REITs, Equity Fear Factor Edition

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Punta Cana Domincan republiC

Street Scene in Punta Cana, Dominican Republic

Maximum State Pension and Pension Age in Select Countries

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Most developed countries offer a decent pension to their retired citizens, However the annual amount paid out to retirees varies from one country to another. In addition, the retirement age to qualify for a state pension also differs slightly between countries.

The following table shows the maximum annual state pension and the state retirement age for select countries:

Click to enlarge

OLYMPUS DIGITAL CAMERA

Source: Are investors too reliant on the state?, Schroders

Among the developed countries, France has the lowest retirement age. This is not surprising since the country is a nanny state with the French expecting the state to take care of them from cradle to grave. Hence the current state proposals to reform labor are met with protests across the country causing chaos to millions to locals and tourists alike.

In the US, the retirement age to receive state pension is 66. Despite the myth about most Americans not trusting the state and worship of free market ideologies,  the majority of them depend on the state pension after their retirement for basic survival. The high dependency of Americans on the state is because private source of funds for retirement like 401Ks, savings, company-paid pensions, investments, etc. are not available or dependable for retirees. Since social security is guaranteed and one cannot lose it like with stocks and other asset types, retirees depend on Uncle Sam more than any other sources.