The Long Term Investor

I just re-checked.....and I do not see anything EXCEPT for what is referenced in the post above on this issue.

 

PLEASE NOTE: I.....AM NOT....advising anyone to move their account out of Robinhood.

BUT for me.....the way I look at where I want to have......"MY"....brokerage account......is summarized in my prior post:

"THIS is EXACTLY why I have ALL my various brokerage accounts that I manage at SCHWAB. I want the POWER and resources of one of the largest brokerages in the world standing behind my accounts and my money. I dont want some......NEWBIE....FAD....PHONE APP brokerage......that I cant even call on the phone....that has NO record of being in business for any substantial length of time......holding my money and controlling my ability to trade or manage my funds.

I....DO NOT.......see anything that Robinhood is going to go under. BUT......there is NO brokerage that is totally immune from financial failure.....stuff happens. AND....in theory when a brokerage FAILS......your account is secure and not impacted. BUT......in a nasty failure.....your account might be tied up for weeks to months....depending on the extent of the MESS.......before you can get it out of the old brokerage and into a new one. What a mess if you are a trader and end up with an account that you can not access for weeks or months.

SO......I dont care to take that sort of risk....even though slight. I want a FULL SERVICE.....discount broker....like SCHWAB to hold my account.....for......MY..... own comfort, safety, and convenience in doing business. It is.....ALL ABOUT ME.......and....MY MONEY."

 

One SUPER HOT open today. As I expected......the WBS story has fully run its course and is NOW old news......time to move on.

If we can hold onto this open all day I will be back at an all time high again.

HERE is the earnings news.....so far.....today. I do not own either of these so not going to put up the details. I will JUST put up the summary for each:

Exxon Mobil reports a $20 billion loss, fourth-straight quarter in the red

https://www.cnbc.com/2021/02/02/exxon-xom-earnings-q4-2020.html

"Key Points

• Exxon beat estimates on the bottom line, but revenue came up short of expectations.
• “The past year presented the most challenging market conditions ExxonMobil has ever experienced,” Chairman and CEO Darren Woods said."

AND

Alibaba’s cloud division profitable for the first time as Jack Ma’s empire faces regulatory scrutiny

https://www.cnbc.com/2021/02/02/alibaba-baba-earnings-q3-2021.html

"Key Points

• Alibaba reported profitability for its cloud computing business for the first time.
• Alibaba’s fiscal third-quarter earnings come as the company faces mounting pressure from Chinese regulators over its business practices.
• Alibaba’s earnings per share and revenue both beat analysts’ expectations."

MY COMMENT

Baring some new.....mini-swan.....event....I expect that this will be a BIG WEEK for investors. We are already seeing the action caused by UNAPPRECIATED recent earnings as well as the anticipation of the after hours earnings tonight. Add in the market having EXHAUSTED the WBS story and everything is in place for a BOOMER of a week.

 

I talked about SPAC's back a few posts. I like this little article.....it applies to SPAC's as well as ALL the day trading, WBS stuff and other RISKY market behavior we have been seeing lately.

SPACs, Thematic ETFs and the Perpetual Hunt for Investing’s Next Big Thing
Successful investing doesn’t require moonshots.

https://www.fisherinvestments.com/e...-perpetual-hunt-for-investings-next-big-thing

BOLD is my opinion OR what I consider important content)

Investor optimism is widespread today—rationally so, in our view. But rising optimism often spurs greed, which can invite big mistakes. Opportunities to act on that emotion abound today, especially as headlines trumpet the excitement—and hot returns—surrounding SPACs (special-purpose acquisition companies) and thematic exchange-traded funds (ETFs). (And, um, meme stocks chased by users of a certain freewheeling Internet forum, but this article isn’t about that.) We caution investors against getting carried away with these stories. (And, we guess, against chasing heat generated by users of a certain freewheeling Internet forum, but again, this article isn’t about that.) If you are investing to fund retirement (or some similar long-term goal), buying today’s narrow highflyers isn’t necessary to achieve your investment goals.

As we wrote in detail last November, SPACs are known popularly as “blank-check” companies. They raise money through an initial public offering (IPO) with the goal of finding a private firm and taking it public through a reverse merger. So if you buy fictional SPAC ABC and it buys fictional startup HydroGenZCarStop, you become the proud owner of stock in HydroGenZCarStop—now a public company after circumventing the traditional IPO route and associated paperwork. Thematic ETFs are narrow funds that invest in companies ostensibly related to a certain idea or trend—e.g., going “green,” technological innovation, veganism, etc.

Thematic ETFs and SPACs are popular today—despite a high-profile case of alleged fraud last year for the latter—thanks to widely touted examples enjoying gangbuster returns. Heck, there is even a thematic SPAC ETF! (Actually, several of them.) The pandemic may have also bolstered interest. Some experts worried virus fallout would hamper the traditional IPO market, and SPACs offered an avenue to raise capital. According to some industry observers, the traditional IPO process can take 12 – 18 months, whereas a SPAC reverse merger can wrap up within 5 months (and in some cases, 5 weeks). SPACs accounted for 56% of US IPO volume in the last 12 months—the highest on record—nearly trebling their share at 2020’s start. For thematic ETFs, some cite anecdotal evidence of investors stuck at home driving interest in investing in ideas—e.g., socially distanced lifestyles.

However, we see some notable caveats to keep in mind. Buying a SPAC means buying an IPO—and as the old saw goes, IPO stands for “it’s probably overpriced.” Given SPACs’ widespread attention and hype, interested buyers likely must pay a premium price.

Moreover, you don’t know what you are buying. The SPAC raises the capital and has two years to acquire a firm—otherwise, they return funds to investors—and they generally go public without a merger candidate in mind. You might not even know which industry they plan to target. You are buying a stock purely on the hope someone else will find a needle in a haystack—not a great thesis to own, in our view.

Investing in a thematic ETF also isn’t as straightforward as it sounds, and investors must do their research to ensure the marketed theme aligns with the fund’s holdings. For example, a vegan ETF’s largest holdings are giant, multinational Tech firms—probably not the first companies that comes to mind for those seeking to invest in an animal-free lifestyle, especially if they serve meat at their on-campus cafés.[ii]

Moreover, how does a SPAC or themed ETF fit within your portfolio? You can’t know that with a SPAC until it acquires a company—and that acquisition may throw your designated sector weightings out of balance. Thematic ETFs usually focus on niche corners of the market and may be very undiversified, leaving your portfolio far out of sync with the broader market.

Heat chasing is another risk to consider, as is the high likelihood your thesis to own rests on quite widely known information. You can see this clearly in the thematic ETF space. A theme’s hype drives the idea to create an ETF, which takes several months to launch. In our view, markets are efficient discounters of widely known information, so by the time an ETF is public, its price reflects all the opinions and expectations surrounding the idea. Before buying into the hoopla, ask yourself: Do you know something about SPACs others don’t? Or, as one Wall Street Journal column wisely quipped, “If you think you’ve spotted a theme that other investors haven’t fully appreciated yet, ask yourself how come there’s already a thematic fund for it.”[iii]

We aren’t inherently against these securities, but we don’t think any investment strategy should center on them. Buying a SPAC or themed ETF presumes successful investing depends on huge gains from concentrated positions in highflyers. We disagree: Investors seeking long-term growth should target market-like returns over the long term with a diversified portfolio designed with their specific goals, objectives and time horizon in mind. Sound boring compared to headlines cheering SPACs or friends boasting about their vegan ETF’s healthy gains?[iv] Maybe. But today’s primary challenge, in our view, is maintaining discipline and sticking with a plan instead of giving into greed.

Right now it may be overly difficult to accept that, as greed seems to be only starting to bubble. But if we have the great year we expect, staying disciplined could get harder and harder. Remember: There is a rich history of people getting poorer by chasing flashy returns.

MY COMMENT

The message in this article.....as rational and simple as it gets. It is easy for many investors to just jump on any bandwagon that happens to drive by. SO.....they just LURCH from fad to fad and ALWAYS happen to get in toward the tail end of whatever the fad is. The result......constant LAGGING returns. This is why the MAJORITY of regular investors.....and.....even the majority of the professionals CAN NOT beat the returns of the SP500 over the longer term. LONG TERM being 5-10 years or longer.

 

gtrudeau88 said:

"I wouldn't mind forgetting about the last week and a half.'

Dont WORRY......another week or two and it will be ancient history. Just a small historical footnote and curiosity in the history of investing.

WEIRD......that "new normal" did not last long. SUDDENLY....we are back to the same old normal....just like always happens when people are saying......"this time it is different".

 

I am not too sure this little article is very timely.....but....I will throw it out there since I am sure there are many people that invest in the SP500 through 401K and other plans that might not have thought about this much.

How Tesla's S&P 500 Addition Affects Fund Investors

https://money.usnews.com/investing/...s-understanding-tslas-addition-to-the-s-p-500

(BOLD is my opinion OR what I consider important content)

"When Tesla (ticker: TSLA) was added to the S&P 500 in December 2020, it was likely the biggest company by market value added to the benchmark index.

At the time, Tesla's market cap was $600 billion. That has grown to around $800 billion, and the company has seen monster valuation growth. In 2020 alone, TSLA stock rose more than 700%. Goldman Sachs said in a research note that had the electric vehicle maker been in the S&P 500 since the beginning of the year, the index's return would have been 18% rather than 16%.

What that means is that investors who own a mutual fund that tracks the S&P 500 automatically own a little bit of Tesla.

"Like it or not, people are going to end up owning it because if they own the index, or some variation of it, they are going to be shareholders of Tesla," says Alex Chalekian, founder and CEO of Lake Avenue Financial.

Some of the best-known and widely used mutual funds tracking the S&P 500 include the Vanguard 500 Index Fund (VFINX), the Fidelity 500 Index Fund (FXAIX) and the T. Rowe Price Equity Index 500 Fund (PREIX). Those three index funds are also commonly found in 401(k) retirement plans.

Because all three of the funds closely track the S&P 500, Tesla makes up 1.69% of their portfolios' holdings and is the fifth-ranked name in terms of weighting, as of December 2020.

Tesla missed analyst estimates on earnings for the fourth quarter, but reported a profitable quarter for its electric vehicle and solar business – wrapping up its first full profitable year in 2020.

Pat O'Hare, chief market analyst at Briefing.com, says a lot of high expectations are priced into Tesla's stock price as shareholders see it as a transformative company and not just another automaker.

"The narrative that took over last year, and certainly after it was announced that it would be added to the S&P 500, was effectively that its battery technology is going to be a massive game-changer and a huge beneficiary for the global climate," he says.

Chalekian says it was unprecedented to see a company of Tesla's size added to the S&P 500. "I would much rather have had Tesla go in when it was at an $80 billion market cap, not when it's an $800 billion market cap," he adds.

What Tesla's Addition Means for Mutual Funds That Hold TSLA
Investors who own index funds that hold Tesla, especially those that are market-cap weighted like the S&P 500, may want to brace for a little more volatility than they are used to experiencing, O'Hare says.

Considering that the top three S&P 500 holdings, Apple (AAPL), Microsoft Corp. (MSFT) and Amazon.com (AMZN), are around 15% of the index's weight, investors have seen how just a few stocks can drive the market. "If Tesla is in that cohort, it opens the door for larger moves, up and down," O'Hare says.

While a sell-off in Tesla alone might not shake the index a lot, if there's a collective sell-off among megacap companies in the tech sector, an index fund investor should expect to see "a pretty good drawdown if they're all fully participating in the sell-off," O'Hare says.

Investors who held mutual funds that were invested in Tesla before the stock's massive run-up should also check to see how much the position has swelled.

Adam Sabban, a research analyst for equity strategies at Morningstar, wrote in a research note that in 2014, the Baron Partners Fund (BPTRX) bought a stake in the company worth 5% of the fund's assets. As of December 2020, that stake stood at 47% of net of assets.

"At such a level, the stock effectively controls the fund's fate," Sabban wrote, saying Tesla's gains circumvented the fund's risk controls.

Other Mutual Funds That Hold Tesla
Aside from index mutual funds following the S&P 500, other mutual funds hold the company. The USAA Nasdaq-100 Index Fund (USNQX), which follows the Nasdaq-100 Index, has Tesla at about 4.5% of net assets and as its fourth-largest holding.

Steve Azoury, financial advisor and owner of Azoury Financial, says he has noted even some actively managed fund families usually considered more conservative, such as American Funds, have had a position in Tesla even before it was added to the S&P 500.

He points out that Tesla is the top holding in the American Funds New Perspective Fund (ANWPX), at 7.1% of net assets. The fund's total assets are around $130 billion. New Perspective's objective is to take advantage of global trade patterns by investing in multinational companies that have strong growth prospects.

The $265 billion American Funds Growth Fund of America (AGTHX) also has a hefty position in Tesla, at 7.3% of net assets. According to the fund's prospectus, AGTHX seeks opportunities in traditional growth stocks as well as cyclical companies.

Azoury uses these two funds with clients and says he has noticed they significantly increased their holdings in Tesla in 2020.

Azoury says another mutual fund that expanded its Tesla holdings is the Harbor Capital Appreciation Fund (HCAIX). For this $42 billion fund, Tesla is the third-largest holding, at 6.7% of net assets, behind Amazon and Apple. HCAIX is an aggressive growth fund that looks for catalysts expected to drive long-term growth rates.

Even though the three funds have significantly higher weightings in Tesla than index funds, he is not concerned – and the American Funds family is one of his favorites.

"They're very consistent and they don't do stupid things," he says. "It encourages me that if they're buying Tesla, then they think it's for real.""

MY COMMENT

The information in this little article shows how MAINSTREAM the Tesla stock has become. It has become a common holding in many of the worlds top Index funds as well as managed mutual funds. It is a genuine phenomenon. Does that mean it is a good investment for EVERYONE.....no. dont just jump in. Still consider carefully your risk tolerance and your investing plan and goals. This is STILL a very young company.....and.....NO stock is ever a sure thing or right for every investor. In addition.....before you run out and buy some shares.......consider that......you probably own the stock if you own an Index Fund or other ETF or mutual fund.

 

gtrudeau88 said:

"WXYZ, what do think of a strategy of keeping most $ (say 85%) in long term positions but keeping some $ (say 15%) available to take advantage of short term trends, trends that have a basis in reality (not $GME)?"

WELL.....I think that can be a rational strategy. If I was doing it I would stick to around 10%.....for me that would be more realistic and cap my potential for greed a little bit. Personally....I do....once in a while....if I see a specific opportunity....make a trade. For example my APPLE trade leading up to the SPLIT DAY. AND.....some of the OPPORTUNISTIC trades I have done in the past that are in this thread.

To me the danger for anyone is.......constant day trading of the 15%....rather than holding back and ONLY using that money for great single opportunity occasions. BUT....that is just me. I think it is better for someone to be at least 85% or 90% long term invested than not be long term invested at all. For many people I think this gives them the chance to get the mental challenge of trading and short term investing and at the same time LIMIT THEIR RISK.

If I was doing this strategy.....I would evaluate my results every year and see.....first.....am I losing money. Second..how much are the losses on the trading of that 15% PULLING DOWN and impairing my long term returns. I would WEIGH the benefits and gains versus the drag on my returns and decide.....is it worth the short term THRILL.

In the END....the bottom line is......am I making money and am I beating my long term strategy.....if not...WHAT IS THE POINT...other than ENTERTAINMENT. My goal in investing is to make the BEST RETURN that I can and to make the MOST money that I can. So if something is a drag on those goals.....I would not do it.

BUT.......I agree that it can be a RATIONAL and good strategy....especially for someone that is going to trade anyway.

 

YES.....markets STILL KICKING ASS today.

 

YES.....agree completely.....DISGUSTING. To be SCREWED like that by your own broker...I have NEVER seen anything like that in over 45+ years of investing.

I STRONGLY HOPE that anyone that has them as a broker BAILS. What a pain....having to move your account. ESPECIALLY with a broker that you can not call and probably has ZERO support to help people......BAIL. The good thing is......at least with SCHWAB who I know about since they are my broker.....they will handle everything to move an account. You just go in to the Schwab office and fill out the forms and they will take care of dealing with the prior broker and getting your account moved over.

I am SURE any of the BIG NATIONAL brokers will do the same thing.

BE sure to transfer any current holdings....."IN KIND"....to avoid selling them and having capital gains or having to re-buy them.

In-Kind Transfer: How to Transfer a Brokerage Account

https://investorjunkie.com/stock-brokers/how-to-transfer-accounts/

"When opening a new investing account, it often seems more comfortable to stick with your existing online broker — even if you're dissatisfied with the fees or customer service. Many investors believe that transferring a brokerage account is difficult. But it doesn't have to be. Here's how to do an in-kind transfer to your investments between brokers.

How to Transfer Brokerage Account

1. Check Account Transfer Fees
In some cases, stock brokers charge transfer fees when you decide to leave them behind. But don't let this stop you. The truth is, you might be better off paying that one-time fee if, as a result, you end up with a brokerage that better suits your needs (and costs less over time).

As you transfer, though, there are some things to keep in mind. After all, you're transferring your (hopefully) valuable securities. In most cases, you'll have to pay an exit fee before leaving. However, as you'll see, most brokers will reimburse that fee as a bonus for transferring to their service.

Here's a list of online stock brokers and their respective exit fees. Some stock brokers charge differently for a partial transfer (Merrill Edge on the low side and TD Ameritrade on the high side) and some charge for closing out an account.

2. Do Your Research Before Transferring
Before you initiate a transfer between brokers, it's a good idea to contact the new broker to discuss your situation — especially if there are potentially complicated factors.

• Find out what the individual broker's process is, and discuss the assets that you plan to move. A few minutes on the phone with the new broker can help ensure that everything goes as smoothly as possible.
• Retrieve/record the transaction history from your old broker. Make a record of all the securities you own before the transfer occurs.
• Per a ruling implemented in 2011, the history will be passed onto the new broker and will not be lost. However, you should have your copy just in case. If you don't have this information and end up selling any securities, you'll likely have a bit of a headache at tax time. It also becomes harder to know the profit/loss of individual security.

3. Get Broker Reimbursement Promotions
Most stock brokers charge a fee when you leave the brokerage. If this is the case, your new discount stock broker might reimburse you for that amount.

Here's a list of some brokers that currently will reimburse your fee or offer other incentives for signing up:

1. Public.com — Commission-free Trading app.
2. E*TRADE — $0 commissions to trade stocks, ETFs, & options.
3. Wealthfront — Get up to $15,000 managed for free when you transfer at least $500 from an existing 401(k) or IRA
4. Merrill Edge — Get up to $600 cash when you invest in a self-directed account

4. Let the New Broker Handle the Transfer for you

Transferring an investment account from one broker to another is a specialized process, so you're better off letting the brokerage firms work it out between themselves. It's best to have the new broker affect the transfer since your old broker will have little incentive to handle an outgoing account.


The new broker will have you sign an authorization to initiate the process, then contact your old broker and handle the transfer directly. Be ready to supply a copy of your most recent statement from the old broker, as it will make the process easier for the new broker.

5. Give Special Consideration for Retirement Accounts
There are different ways you can transfer funds between brokers for retirement accounts. But the best way is to have the transfer completed directly from one broker to another, rather than first having the funds transferred to you personally.

A broker-to-broker transfer of retirement accounts eliminates the possibility of the old broker withholding 20% of the account value for taxes. It also eliminates the possibility that you might miss the transfer time limit (60 days), after which the transfer to you personally would automatically be considered a fully taxable distribution from your account.

6. Handle All-Cash vs. Individual Securities
The quickest, easiest, cleanest way to do an in-kind transfer between brokers is when the old account is all-cash. This would require liquidating any investment positions before you make the transfer. If you are transferring investment securities, the process will take longer — usually several days.

7. Be Prepared to Lose Control of Your Investments During the Transfer
If you're transferring a portfolio of securities, you will not have access to your portfolio during the time it takes to transfer out from one broker to another. Make sure you're comfortable with the positions that you hold in your old account before beginning the transfer process to the new one. Assume it will take at least five business days, and plan accordingly.

8. Be Sure You are Transferring Equivalent Accounts

If you are transferring an account you hold individually into a new account that will also be held separately; the process is simple. But if you're going to transfer a joint account into an individual account, additional paperwork will be required, and probably additional time as well. If you want to change the setup of the account, it might be better to make the transfer first, then make the account change. That will create two less complicated changes, rather than one big, messy one.

9. Make Sure you Carefully Review the Results of The transfer
The easiest way to do this is to compare the most recent statement from your old broker to the initial statement from the new broker. Better yet, get a printout of your account with the former broker just before the transfer takes place.

You want to make sure that all securities and cash balances have been included, that nothing has been unintentionally reshuffled during the transfer process and that no unexpected fees have been charged.

10: Watch out for Account Close-Out Fees on Your Old Account

Most brokers have some sort of exit fee if you close out your account. Depending on the broker, it could be as much as $150. This can be an unexpected surprise if you don't remember that the fee exists. And that's highly likely since it's one of those fees that most investors don't pay attention to in the normal course of business.
But as mentioned above, there are ways to get around the close-out fee and be reimbursed for the brokerage transfer fees.

How Long Does an In-Kind Transfer Take?
Normally, it takes about six business days to transfer an account: About three business days for the old broker to validate the request, and another three business days to transfer your assets to the new broker.
Realize, though, that it can take longer in some cases. If you are transferring an account with a custodian, such as an IRA or an account on behalf of a minor child, it can take longer. That's because the whole process includes another party.
Estimated Transfer Fees: $0-$75.

Automated Customer Account Transfer Service (ACATS)- Makes the Transfer Easier
For most investors, the transfer process moves smoothly and can be done automatically, with the help of a special clearinghouse. The National Securities Clearing Corporation operates the Automated Customer Account Transfer Service (ACATS), and it's normally possible for your cash, stocks, and bonds, as well as certain listed options, to transfer easily (at least from an investor standpoint).

• To transfer your account from one broker to another, you first need to fill out a Transfer Initiation Form. This form is then sent to your new broker. In many cases, it's possible to fill out one of these forms online with the new broker. This makes the process a little easier for you. Once you have submitted your Transfer Initiation Form, your new broker (“receiving firm”) contacts the old broker (“delivering firm”) through ACATS and begins the process.
• Fill out your form carefully and accurately. If the information on your form doesn't match the information that your old broker has on the account, the request to transfer the account can be denied.
• If everything is in order (and you might be required to validate the form before it is approved), your old broker will send a list of assets that you have to the new broker. Your new broker then decides if it wants the account. It's possible that the new broker will reject your account.
• Before trying to initiate the transfer, check the policies of the new broker. In some cases, the quality of securities may be in question (especially if they're supporting a margin loan), or there may be an issue with minimum requirements.

A Special Consideration When Transferring Taxable Brokerage Accounts
When you transfer securities from one taxable investment account to another, you're transferring not only the securities themselves but the data related to those investments as well. A vitally important piece of that data is the cost basis of the securities that you're transferring. Even though it's part of the transfer process, you should also compile this information yourself.

The new broker should transfer the cost basis of the transferred securities, but do this just in case there's an error or missing information. The idea is to have your cost basis on each of the securities that you transfer, that way, you will have it available when it comes time to report capital transactions on your income tax return.


As a rule, the new brokerage firm may not have the cost basis of a security sold, because that security was purchased through another broker. It will be up to you — not the new broker — to come up with that information for income tax purposes. After all, it was you, and not the new broker, who had the client relationship with the previous broker.
You'll want to perform an accounts transfer well in advance of filing your income taxes. It can be a lengthy process, particularly if any securities were purchased several years ago.

Not having the information available when filing your return will almost guarantee that you will need to extend your return to give you the months that you will need to compile the cost basis information."

MY COMMENT

DONT be afraid to move your account....if you wish. Pick a BIG DISCOUNT BROKER and let THEM do the transfer for you. No reason to do it yourself.

 

Sorry to pop in and out. BUT.....I come on here as my schedule allows. ENJOY this great this great day for investors.....I will be back later.

 

OK.....here is my largest holding....the earnings that I have been waiting for.

Amazon reports first $100 billion quarter following holiday and pandemic shopping surge

https://www.cnbc.com/2021/02/02/amazon-amzn-earnings-q4-2020.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• Amazon announced Tuesday that AWS CEO Andy Jassy will replace Jeff Bezos as CEO of Amazon in the third quarter.
• The announcement came in Amazon’s earnings report for the fourth quarter of 2020, in which it delivered its largest quarter by revenue of all time, generating $125.56 billion in sales.

Amazon beats top and bottom line in Q4, company books $100B in revenue for first time.

Amazon announced in its earnings report for the fourth quarter of 2020 that AWS CEO Andy Jassy will replace Jeff Bezos as CEO during the third quarter of this year. Bezos will transition to the role of executive chairman.

The company also delivered its largest quarter by revenue of all time at $125.56 billion, pushing it past the symbolic $100 billion mark for the first time.

Shares of Amazon were up 1% in extended trading.

Here are the results:

• Earnings: $14.09 vs $7.23 per share forecast by Refinitiv
• Revenue: $125.56 billion vs $119.7 billion forecast by Refinitiv

Bezos announced his decision to step down in the earnings release and in a memo to employees, noting that he will focus on “new products and early initiatives” in his new role.

“If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive,” Bezos wrote. “When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”

After several months of heavy investments, Amazon said it expects coronavirus-related costs to decelerate to about $2 billion in the first quarter of fiscal 2021, down from roughly $4 billion in the third quarter of this year and more than $2 billion in the second quarter.

On a call with reporters, Amazon CFO Brian Olsavsky attributed the step down in Covid costs to a shift in volume. “We’re expecting volumes to drop about 25% from Q4 to Q1,” he added.

The company also experienced higher costs in the fourth quarter after it paid a one-time $300 bonus to front-line employees in November of last year.

The company forecast operating income of $3 billion to $6.5 billion in the fiscal first quarter, assuming the roughly $2 billion of costs related to Covid-19.

Amazon said sales in the first quarter will be between $100 billion and $106 billion, a slowdown from the fourth quarter of 2020, but an increase of between 33% and 40% from a year earlier. Analysts were expecting revenue of $95.8 billion.

Amazon’s blockbuster fourth-quarter results were driven in part by what the company called a “record-breaking holiday season,” during which it delivered more than a billion products to shoppers worldwide. Continued accelerated e-commerce demand and a pandemic-delayed Prime Day also contributed to Amazon’s record revenue in the quarter.

Once again, the costs of shipping those goods to consumers ticked higher, with expenses up 67% from a year earlier to $21.5 billion.

Outside of its core retail business, Amazon’s cloud-computing unit saw its revenue climb 28% to $12.7 billion from $9.95 billion a year earlier. That fell short of Wall Street’s expectations of $12.83 billion.

Sales fell 8% in Amazon’s physical store unit, which includes Whole Foods Market, as the pandemic has pushed shoppers to experiment with new shopping methods, including online grocery ordering."

MY COMMENT

DEFIANTLY blow out earnings. The change over from Bezos is certainly news. I have not heard any advance news of this happening....they kept it under wraps nicely. Probably not a bad way to make the transition. Bezos will obviously STILL have a HUGE role and will be fully involved...at the same time....the company will get a change to move on to a new generation of leadership. Lets HOPE that the MAGIC is not lost.

Here is a tiny bit about the new CEO:

"Jassy joined Amazon in 1997 as a marketing manager.[6] In 2003, he founded Amazon Web Services (AWS), with a team of 57 people.[8] In April 2016, Jassy was promoted from senior vice president to CEO of AWS."

Who Is Andy Jassy? Amazon Web Services CEO to Replace Jeff Bezos

https://www.newsweek.com/who-andy-jassy-amazon-web-services-ceo-replace-jeff-bezos-1566302

"Andy Jassy, the head of Amazon Web Services (AWS), will be taking over as Chief Executive Officer of Amazon in the third quarter, replacing the company's founder, Jeff Bezos.

The company made the announcement that Jassy would replace Bezos, who is moving to the role of executive chair, on Tuesday afternoon, although there was long-time speculation that Jassy would be taking over the reins. Jassy, who helpd found AWS in 2003, became CEO of AWS, the on-demand cloud computing subsidiary of Amazon, in 2016.

"I'm excited to announce that this Q3 I'll transition to Executive Chair of the Amazon Board and Andy Jassy will become CEO," Bezos said in a letter to employees, according to CNBC. "In the Exec Chair role, I intend to focus my energies and attention on new products and early initiatives. Andy is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence."
Jassy first joined Amazon in 1997 and pushed the company to add music sales to its retail services, according to The Washington Post In the early 2000s Jassy, now 52, had a role as "Jeff Bezos' Shadow," which Forbes described as akin to a chief of staff/technical advisor role. The two spent most of their time together and eventually AWS was born, although there was no "ah-ha" moment in its creation where the lightbulb went off. Jassy also told Forbes they didn't predict it would become the powerhouse that it is today.

"Andy embodies the culture of Amazon," Matt McIlwain, the managing director of Madrona Venture Group, a Seattle venture firm that invests in cloud start-ups, told The Washington Post. "He has consistently demonstrated the ability to be a builder."