Internet stocks are
not for the faint-hearted, the head of online book and music
retailer Amazon.com Inc warned on Monday, advising retail
investors to steer clear or risk only a small part of their
"It does not take much analysis to say that all Internet
pure-play stocks, including Amazon.com, are extremely vulnerable
they can be up 20 percent a day and down 20 percent a day,"
Jeff Bezos told Reuters.
"In my opinion these are not appropriate investments for
small investors, or maybe all but the smallest fraction of their
portfolio, and they are certainly not investments for any
investor who is a short-term investor," he said.
Amazon has ridden a wave of interest in Internet stocks to
around $117 a share from a 1998 low of below $9, but Amazon
founder Bezos said he didn't waste time worrying about the
"In Internet business, customer value is created. So over
the long term the Internet is going to work out. Businesses are
going to thrive on the Internet, customers are going to thrive,
people are going to create important and lasting companies.
"As to what the share prices should be at any given stage
that is a very complex question. If you look at Amazon.com,
the people at Amazon.com, we do not spend very much time every
day thinking about the share price because for us every second
thinking about the share price is a second wasted."
Bezos, who was in Davos to attend the World Economic Forum's
annual meeting, a global business summit, said the bookseller's
goal was building a lasting company.
"That is a full-time job and it is the full-time job of the
Wall street analysts and investors to try and figure out how
much these companies are worth. I do not envy them their job
it's a hard one."
He declined to comment on the question when Amazon.com might
start turning a profit. It made a loss of 14 cents a share in
the latest quarter, worse than the 8 cents a share loss a
year earlier, but this was still better than Wall Street
expected, so its shares went up again.
Bezos played down prospects that the millennium bug, or year
2000 (Y2K) problem, would lay waste to the computer world at the
turn of the year, but said the bug may still sneak up on people.
"The problem is that even if companies do a good job of
eliminating the Y2K dependencies from their own systems, you do
not know if all of your vendors have eliminated the Y2K
dependencies from their systems," he said.
"It is impossible for any company to assure that there are
no Y2K problems. But ... my guess is that because there has been
so much hype maybe nothing will happen."