As Amazon becomes a trillionaire, a lesson to remember from Jeff Bezos

By Alec Hogg

It’s four years ago this month that the Biznews Global Share portfolio was born. It got off to a good start, but there were some technical issues, so we re-started the project with a notional $200,000 in December 2014. Since then the portfolio has doubled in US Dollars and risen by more than 40% a year in Rands.

Prime reason (pun intended) is Amazon, into which 8% of the initial portfolio was invested at a price of $327 a share. Yesterday Amazon became the world’s second “trillionaire” by market capitalisation when hitting $2,050 a share. We stayed aboard this winner, as one does when you luck out on a champion. Today Amazon accounts for over 25% of our portfolio.

Looking back at that December 2014 webinar makes interesting reading. Our slide on Amazon was headlined “Oh ye of little faith.” The company’s stock had underperformed the NASDAQ index by a hefty 30%, largely because traders hated the $470m loss it took on a mis-adventure into smartphones.

Despite a 20% share price slump, founder Jeff Bezos rejected criticism, publicly telling anyone who cared to listen the company would always make bold bets because failures were what made Amazon grow. Great advice. Not just for a company. In life, too. There is no greater teacher than experience.