Bill Miller, Miller Value Partners CIO, joins ‘The Exchange’ to discuss where he sees markets going in 2019.
H/T Dataroma
Bill Miller Says Amazon Will Hit A Trillion Dollar Market Cap
Q3 hedge fund letters, conference, scoops etc
Transcript
You know I think I think the one that's the most problematic just in the short run is Apple because they missed so badly on their on their guidance and for reasons that I think are explainable in fact. Ben Thompson wrote about this over a year ago. Yeah he's signaling that China could have a big problem there because because the Apple iOS doesn't lock you in in China because of the way it does in other parts of the world. Apple's got an 80 percent renewal rate outside of China about 50 percent in China. And then the Chinese slowdown I think has hit them but I think that's I think 12 times this year's earnings Apple certainly not certainly not overpriced but I mean Amazon still up 30 percent over the last 12 months.
Right. If it's done poorly and Bill with Amazon in particular it reminds me of Apple where plenty of people had said look the fact that Apple reached a trillion dollar market cap it's now shed 40 percent of that. But if the same thing happens for Amazon. First of all do you think it's going to hit a trillion dollars and if it hits a trillion dollars is that the time the Bill Miller finally says it's a sell.
Well no. Those are those are artificial numbers. My friend Chris Davis pointed out that his father used to say that any company got a 30 billion market cap was a sale because they couldn't know.
No companies can figure a pretty good market cap that was maybe the case you know 40 years ago but it's not the case today. Apple's Amazon's addressable market is so gigantic that it did hit a trillion dollar market cap and it just pulled back. Not as much as not as much as Amazon as Apple has.
But I think that Apple would it's very unlikely. I told you this several years ago that Apple should Apple like you saying Amazon should double in the next three years and I would say that again right now because it was on the Giancola will be here in three years yet the topline there is going to grow somewhere in the 20 to 25 percent range. And it's only about it's only about I think about 18 times this year's enterprise data done 4000 times next and that is that is not demanding at all for a company that's this dominant with this with this amount of optionality in there.
What about the regulatory concerns then because you know it's one thing for people to talk about how to regulate Facebook and frankly I think that'll probably shore up their dominant position. What happens if Amazon gets broken up.
Well we're we're a long long way from that. First of all you'd have to have you'd have to have the members of Congress come together and change the antitrust legislation and they can't they can't agree on anything in Congress. I think that's you know that's a that's a long way off if that happens. You know the other thing is if it happens and I don't think it will happen or if it does happen it's five to 10 years out although I do think that there can be a lot of noise around that. You know the current administration or a new administration could threaten Amazon's Sue Amazon but it's a long way from doing that to actually actually winning something.
All right we're showing it here. Yeah I do think I do think it's you know it's a risk because there are no stocks without risk.
