From Stansberry Research:
Some people say he was the greatest investor ever...
Between 1976 and 1991, Peter Lynch was a rock star in the mutual-fund world.
For 13 years, Lynch returned 29% a year to the 1% of Americans who were clients of his firm – Fidelity Investments – and put their money in his Magellan Fund.
In his book One Up on Wall Street, Lynch describes the kind of company you want to own over the next decade: "In business, competition is never as healthy as total domination."
This week's company wields "total domination" over just about every market it enters.
Every day of the week (even on weekends), boxes from this company are shipped out to homes across the country. The upturned arrow stamped on all the deliveries is instantly recognizable.
The company behind these boxes and deliveries has built a strong portfolio of businesses and set itself up for long-term gains...
Jeff Bezos, founder and CEO of Amazon (Nasdaq: AMZN), runs his company for the long term. He doesn't seem to care the slightest bit about quarterly or even annual earnings.
That's an advantage.
At this point, it's tough to find a reader who's not familiar with this online-retail colossus.
Those brown boxes with a smile that you see on all of your neighbors' doorsteps are Amazon deliveries of books, household goods, clothes, electronics, and just about everything else.
For many folks, Amazon is their first stop for nearly anything they want to buy... And by many, we mean millions of people have swapped out most of their retail shopping for Amazon.
Even beyond basic Internet retailing, Amazon offers a plethora of web-based services...
Amazon can store your photos or host your website on its cloud. It can deliver items to your door in two hours. You can even stream movies like Oscar winner Manchester by the Sea – which Amazon Studios produced – on Amazon Prime Video.
Amazon has booked insane growth and pervaded the U.S. economy by having a fundamentally different approach than any other company we know. It focuses on the long-term view...
"If everything you do needs to work on a three-year time horizon, then you're competing against a lot of people," Bezos said in a 2011 interview with Wired magazine. "But if you're willing to invest on a seven-year time horizon, you're now competing against a fraction of those people, because very few companies are willing to do that."
As you probably know, Amazon started in 1994 as a bookseller... But Bezos built the company by going against expectations and testing new ideas.
It seemed like a strange choice in 1998 when Amazon branched out to sell other items. In those days, people went to different websites to buy different things.
Aside from selling "everything," Amazon has undertaken big projects that turned into great businesses. Those projects took a lot of time and capital... and seemed a little crazy at the time.
Consider the Kindle e-reader, which Amazon first released in 2007. The thought of a bookseller making hardware was a huge leap in thinking and a big risk... But today, e-book sales total more than $13 billion. Amazon claims about 80% of the e-reader market with its Kindle device.
A lot of companies are betting that the "smart home" will be the future of technology.
To that end, Amazon jumped into hardware again with the Echo "smart speaker" – a cylindrical device for your home that listens to voice commands and responds by playing music, adjusting the controls around your home, and ordering things from Amazon.
The device now makes up nearly 67% of the "smart speaker" market... And Amazon is branching out into new versions like the smaller-sized Echo Dot.
These are just two of Amazon's business... And they don't even compare to Amazon's biggest success...
Amazon's cloud-computing business "Amazon Web Services" (AWS) has changed the way the Internet works.
Prior to AWS, a business that needed an IT setup to host websites or databases could spend tens or hundreds of thousands of dollars and work for weeks to get their own servers up and running. With AWS, deploying the same capabilities takes hundreds of dollars and less than a day.
That's why major companies like Netflix, Comcast, and 3M use AWS to host services.
From Amazon's perspective, AWS practically prints money. For years, Amazon hid the AWS results within its broader revenue numbers... But in 2015, the company started reporting the service's revenue numbers.
Now, AWS accounts for more than $25 billion in revenue (or 11%) of Amazon's total sales. More impressive, it represents $7.3 billion in operating profit, or 49% of Amazon's total.
This is the way technology will work for decades... And Amazon has a stranglehold on the market.
Perhaps the only thing more impressive than Amazon's business is the upward surge of its shares.
Take a look...
Over the past five years, Amazon's stock has soared more than 550%. This dwarfs the 50% gain from the S&P 500 over the same period.
The company's moves into the cloud and smart speaker markets set it well ahead of its competitors.
As long as Amazon's products remain a "necessity" for consumers and businesses alike, the company should continue to have long-term success.
Sometimes investing is simple.