Thread by @JerryCap

Spent yesterday reading Amazons Shareholder Letters.

Here are some of my favorite Quotes:

Thread 1/N

1997: Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.

1997: When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.

1997: Word of mouth remains the most powerful customer acquisition tool we have.

1997 (😂): Online commerce in general, should prove to be a very large market.

2000 - with shares down 80% in reference to Ben Graham quote: We’re a company that wants to be weighed, and over time, we will be—over the long term, all companies are. In the meantime, we have our heads down working to build a heavier and heavier company.

2000 - on bold bets and failure: Online selling is a scale business characterized by high fixed costs and relatively low variable costs. This makes it difficult to be a medium-sized e-commerce company... {continued}

... With a long enough financing runway, Pets.com and living.com may have been able to acquire enough customers to achieve the needed scale.

2000 - I wonder if he thinks this number is low: We still believe that some 15% of retail commerce may ultimately move online.

2001 - where he first outlines what Nicholas Sleep coined “scale economics shared”: Focus on cost improvement makes it possible for us to afford to lower prices, which drives growth... {continued}

... Growth spreads fixed costs across more sales, reducing cost per unit, which makes possible more price reductions. Customers like this, and it’s good for shareholders. Please expect us to repeat this loop.

2002 where he explains why traditional retailing is a garbage business compared to an at scale e-commerce company :

2004 - an entire letter explaining Free Cash Flow: Future earnings are a component—but not the only important component—of future cash flow per share. Working capital and capital expenditures are also important, as is future share dilution.

2004: The duality between earnings and cash flows—comes up all the time… Cash flow statements often don’t receive as much attention as they deserve. Discerning investors don’t stop with the income statement.

2008: Long-term thinking levers our existing abilities and lets us do new things we couldn’t otherwise contemplate. Seek instant gratification – or the elusive promise of it – and chances are you’ll find a crowd there ahead of you.

2014 AWS is a Dreamy Business

2015: Every once in a while, when you step up to the plate, you can score 1000 runs.

2015: We want Prime to be such a good value, you’d be irresponsible not to be a member.

2016: “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

2016: Second, most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow.

2017: As always, I attach a copy of our original 1997 letter. It remains Day 1.

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