In his annual letter to shareholders, Jeff Bezos, Amazon founder and chief executive officer, announced that the company’s Prime service now reaches 100 million members worldwide. The company has also shipped more than five billion items and convinced customers to buy “tens of millions” of Echo devices, he wrote.
That success, in part, could explain why Bezos’ net worth was just shy of $130 billion Thursday.
And if you invested in Amazon early on, you wouldn’t be doing too badly either. Your initial outlay of $1,000 in 2008 would be worth more than $19,300 Thursday, according to CNBC calculations, or over 19 times as much, including price appreciation and dividend gains reinvested.
In the charts below, all data splits are adjusted and gain-loss figures do not include dividends, interest, distributions or fees except on cash accounts. The portfolio value represents current holdings and the comparison charts represent current and historical prices of individual benchmarks, stocks or exchange-traded funds.
While Amazon’s stock has performed well, any individual stock can over- or under-perform and past returns do not predict future results. That’s perhaps why Warren Buffett, chief executive officer of Berkshire Hathaway, opted not to invest in Amazon when he had the chance.
At Berkshire Hathaway’s annual meeting in May, the self-made billionaire said he didn’t appreciate the value of tech stocks at first: “I was too dumb to realize. I did not think [Bezos] could succeed on the scale he has,” Buffett said, adding that he “really underestimated the brilliance of the execution.”
Citing Amazon’s massive success, Buffett went on to call Bezos “the most remarkable business person of our age.”
That success hasn’t come without hard work. In the shareholder letter, Bezos stressed the importance of having high standards in running a business and meeting customer expectations.
“How do you stay ahead of ever-rising customer expectations? There’s no single way to do it — it’s a combination of many things,” he wrote. “But high standards (widely deployed and at all levels of detail) are certainly a big part of it. Building a culture of high standards is well worth the effort, and there are many benefits.”
If you’re looking to invest in the next Amazon or considering putting some money in the stock market, experienced investors like Buffett, Mark Cuban and Tony Robbins suggest you start carefully.
Begin with index funds, they say, which hold every stock in an index, offer low turnover rates, attendant fees and tax bills, and fluctuate with the market to eliminate the risk of picking individual stocks.
This is an update of a previously published story.
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