Why Sell Amazon Stock?

Why Sell Amazon Stock?
By www.ProfitableTradingTips.com

http://profitabletradingtips.com/profitable-trading-tips/why-sell-amazon-stock
Here is a puzzle for you. Over the last
year Amazon.com stock has gone
from $552 a share to $851 a share.

Over the last five years the stock has
climbed from $179 a share to its
current price, a 5 fold increase.

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Sales are up. Earnings are up. Cash
flow is increasing.

Nevertheless a billion dollars of
Amazon.com stock was sold by hedge
funds in the last quarter of 2016.

Perhaps these folks looked at
disappointing sales in bricks and
mortar stores and believed that there
would be a spill over.

But Amazon.com is the main reason
that brick and mortar stores are in
trouble or already out of business.

We got this tidbit from The Motley
Fool who wrote about well-
known stocks that billionaires
sold heavily last quarter.

arguably one of the biggest surprises
from the release of 13fs was that e-
commerce giant amazon.com
(nasdaq:amzn) was the most heavily
sold stock in q4

with an aggregate of $1.022 billion of
its shares being evicted from hedge
fund portfolios, according to s&p
global market intelligence’s hedge
fund tracker.

some of you might be wondering why
on earth some of the smartest money
managers on the planet were selling
the king of e-commerce.

The writer speculates about why one
would sell Amazon.com.

Our opinion is that they were selling
to show a profit in their funds in order
to impress clients.

This sort of reshuffling is common in
managed funds and not necessarily in
the best interest of investors.

That having been said why might one
sell Amazon.com?

You Need the Money

Successful investors tend to keep their
money in stocks instead of in the
bank.

They sell shares when it is time to buy
a new home, invest in real estate or a
business or to pay college tuition.

These are good reasons that you
might sell Amazon.com stock.

This argument only applies to the
hedge funds if they had a lot of money
withdrawn and needed cash.

There Is a Better
Investment

A good solid investment is stock in
3M.

This well diversified multinational has
grown from $15 a share in the late
1980’s to $186 a share today.

But if you had sold your 3M shares in
1986 and bought Microsoft you would
have done better.

While your 3M share grew 12 fold
over the years Microsoft has grown
about 700 fold.

If the hedge fund managers have
spotted the next Microsoft it was a
smart move to sell Amazon.com.

Unfortunately there is no evidence
that these folks have spotted the next
stock market home run!

The Stock Is Overpriced

This may be the reason that a lot of
smart folks unloaded shares of
Amazon.com.

The los angeles times about how
the market has climbed to record
highs despite uncertainty about
Trump.

but warning lights are flashing about
the market’s ability to sustain the
trend, even setting aside the
possibility of an unexpected move by
the white house or a global event that
could rattle investors, some analysts
said.

for instance, stocks are getting
increasingly rich by historical
standards relative to the underlying
companies’ profits.

the market also inevitably will need
to pull back, or “correct” itself as
traders take profits.

And the recent growth of the market
is disproportionally loaded into stocks
like Amazon.com, Apple and
Microsoft as they seem the most
secure.

But investors seeking security in their
investments have bid these stocks up
into insecure territory.

The old saying go that you don’t have
profit until you take a profit.

That may be the best reason to see a
little of your Amazon.com stock.

Why Sell Amazon Stock?

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