5 July 1994: A bookstore called Cadabra
Jeff Bezos incorporated a company in Washington state under the name Cadabra, soon renamed Amazon after a lawyer apparently heard it as 'cadaver'. The plan was to sell books online, starting from a garage in Bellevue. Books were just the wedge: easy to ship, endless in number, and perfect for a searchable catalog. Anyone who mocked the online bookstore idea in 1994 got a very long lesson in what a starting point can become.
The lesson: Judge a business by where it can go, not only by the modest product it happens to start with.
What it meant for investors
$1,000 in Amazon at the start of 2000 → $55,000 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2000, the first year in our price data after the event. That is 55.0 times the money, and $50,374 more than a plain index fund made over the same years.
What Amazon teaches: Accounting losses are not the same as a bad business; Amazon reinvested its cash flow for years while short-term investors read thin profits as weakness.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2000 | $4.00 | $55,000 | $4,626 |
| 2003 | $1.00 | $220,000 | $7,727 |
| 2005 | $2.20 | $100,000 | $5,763 |
green = beat the S&P 500 · red = lost money
What if you bought Amazon? Every starting year and the full story →
More Amazon history
- 2 February 2021: Jeff Bezos says he will step down as Amazon CEO
- 15 May 1997: Amazon goes public at $18 a share
- 16 June 2017: Amazon buys Whole Foods
- 19 November 2007: Amazon launches the Kindle
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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