I don't defend Amazon and am neither really for nor against them. Just explaining that there *is* a rationale there whether anybody (including myself) chooses to agree with it or not.
I'm fairly certain the shoe on the average AI'rs foot would be different if Apple saw a huge opportunity in the future that they believed could net them a $2,000,000,000,000 and they chose to invest their entire saving of @$150,000,000,000 in it. On that year, assuming Apple 'made' 50 bil from products- they would post a staggering loss (probably the biggest in history) of $100,000,000,000 If data showed they were well poised and hitting landmarks to capture that $2,000,000,000,000 a year market, their shares would go up and their PE would be astronomical. If they actually succeed in capturing the market it was Apple's boldest and biggest success to choose to lose 100 billion dollars in a year. Anyone who invested in them would be staggeringly rich. If they fail, there's a lot of people left with nothing. Amazons staggering revenue growth year over year has shown it is on a steady path, it has without question sacrificed taking profits along the way.
I am not invested in Amazon because I think it is too risky, and largely because I simply don't want them to succeed even though they show continued growth. If Amazon does succeed and their revenue trends continue, when they do stop expanding they are going to pretty much be the only company standing. Blech. I invested quite heavily in Apple prior to the '6 buildup' and am enjoying some success with that. I admit it has nothing to do with fundamentals, other than I am fundamentally counting on people to be irrational. Apple does have great fundamentals, and even better products, but neither are going to add up to the ludicrous valuation and pop I believe Apple shares are just starting to enjoy. It is the 5 all over again. Stock will go nuts, people are going to absolutely love the 6 and it will have record sales. Stock will adjust downward out of the stratosphere when Wall Street does the math. Hopefully I am wrong and I would be happy to be wrong. I'll have made a very nice ROI, and all other Apple shareholders will be driving Ferrari's within a few months. Win/win.
I would love it if you could educate me and improve my naive views. Maybe tell me what a company can do with its income other than taking profits, reinvesting, or returning to investors (yes, where 'litigation' would certainly be a form of reinvesting).
Where a company chooses to draw its line between profits and reinvesting is a key question. Slumlords want to take 100% profits without reinvesting in their product, Amazon wants to reinvest 100% whether it makes or loses money. I think Apple has a very good balance, maybe a little on the cautious side (they were way too skewed previously, but dividends and buybacks were absolutely a balancer).