The Amazon Investment Jackpot Is Happening Now
Oh dear. The Christmas Grinch just did a number on Aussie retail. The Australian reports this morning that Amazon could launch its Australian site in 60 days.
Christmas is when a lot of retailers bank their profits for the entire year. This fight could get brutal.
But don’t shed a tear for them. See the opportunity!
This call on Amazon is from a report from a Citi retail analyst. Check out this quote…
‘Amazon, which recently announced the Melbourne suburb of Dandenong for the location of its maiden 24,000 sqm fulfilment centre in Australia, could also offer free shipping to customers to attract traffic to its site.’
I’ve been banging on about free shipping becoming the new benchmark for weeks now. I said my no. 1 stock could go off like a rocket if a retail war developed around logistics.
Well, something must be happening because my little stock has gone up about 50% in the last week…
The Amazon investment jackpot playing out now
You see, don’t you, that when the market decides to move, it doesn’t give two hoots about some geezer’s crappy earnings forecast or all the rest of the mainstream drivel?
I say that because one reader of my small cap letter wrote in and said he hadn’t bought any of the recommendations because the market was directionless.
Now he’s missed this up move.
When the market decides to go, there’s no time to wait around wondering.
And I’m still bullish on it…
Look what’s happening elsewhere. Supermarket giant Coles is trialling using Deliveroo to make home grocery deliveries within 30 minutes. Deliveroo’s network uses contractors, mostly on bikes and scooters.
Now, this is a minor test in the scheme of the Coles operation. But you can see that Coles knows it has to find a way to stay competitive here.
It’s not alone, either. The world’s largest logistics company — DHL — wants to enter the ‘last mile’ space here in Australia. The company is considering using an Uber-style model to deliver parcels directly to homes.
This is exactly the Amazon Investment Jackpot case I laid out, which is playing out right in front of us.
It’s not going to end tomorrow. It could keep runnning for years. Even if Amazon’s Aussie website is not flying in the next two months, it will happen in the near future and everybody knows it.
I can’t urge you enough: Get on board with where the action is by clicking here. After all, the main index refuses to do anything interesting.
There’s a hot market in the south
And don’t talk yourself out of it by worrying about Australia’s economy. For example, there’s a new $400 million apartment and hotel tower about to go up on the Gold Coast. The level of construction going on around Australia is something to behold.
You might not know it, but Hobart is going through a property boom of its own, while Melbourne and Sydney hog most of the headlines.
Granted, Western Australia has been a property trouble spot in recent years, but with iron ore staying high and exploration rising (no thanks to the government over there), I can see the potential for an uplift.
I mentioned the other day how different sources of funding are flowing into property, mainly because the big banks have been pushed onto the back foot.
Here’s another one. The Australian Financial Review said on Monday that US private equity firm Varde is eyeing off lending to commercial real estate in Australia.
This is a US$12 billion dollar firm.
We also have US firm KKR likely to take over non-bank Pepper Group. The fact that big US money is flowing into Australia is going to heat up the economy.
BlackRock, for one, expects ‘the flood of international capital into real assets to continue’ . These big guys are looking for yield. Bond market returns have been driven so low — even below zero — that property is still attractive.
We can also see the market is going to fill any gap the regulators leave. Foreign-owned banks are happy to lend to offshore buyers in the residential space.
Even China’s capital controls can’t prevent deals, because Chinese buyers have bank accounts in other Asian countries.
Expect things to keep ticking over in property. That should support stocks, but with the usuall dips and rallies, of course
Like I keep saying, there’s plenty of opportunity in the stock market. We just have to go and find it.
Editor, The Daily Reckoning Australia