>Bezos is running it for fun, not to deliver economic returns to shareholders

I that case he's done pretty well delivering ~$150bn in shareholder value accidentally.

My AMZN shares are in a Roth IRA. I can wait.

Amazon stock trades at a P/E of 910. S&P 500 average is currently around 19-20. Do you really expect Amazon to continue to grow at such a rate that its current P/E is justified?

Remember: it's the price-to-earnings ratio and not price-to-revenue ratio.

Amazon's stock trades at a P/E of 910 exactly because it's deferring profit to continue growing its revenue. At some point it's going to stop investing its revenue into growth and start realizing a profit on that revenue. At that point the P/E will come down.

Or perhaps P/E is not the end-all-be-all of metrics for judging value?

I completely agree, however, it is still a useful metric. And when a stock has a P/E of 910 the growth rate that the underlying business must grow at in order to justify such a price is astounding.

P/E approaches infinity as you near "break even", so for a company like AMZN with both massive revenues and expenses, P/E is not useful when the two are almost equal. You must dig further and look at things like cash flow, revenue (not earnings) growth, operating margin (not profit margin), etc. These things give a much clearer picture than an odd-looking P/E. If a company with high P/E had operating margins that ware closer to profit margins (not triple, like AMZN) I would be a bit more concerned.

If capital expenditures are reduced just a bit, or if margins are improved slightly, the E part of the fraction will jump and P/E will fall massively.

All of that being said, there are still plenty of things that could go wrong for AMZN.

Earnings are profits, profits are retained in the company. A simple look at the P/E ratio tells you very little without understanding the broader context.

>> Amazon has perhaps 1% of the US retail market by value.

This isn't surprising considering there isn't much competition (in terms of brick/mortar) in most of the US.

Electronics? Best Buy

Books? Barnes and Noble

DVD's? Best Buy

Video Games? Game Stop, Best Buy

Without much competition in most categories, it's not surprising most people opt for online shopping instead of going to the same place, paying much more and having a crappy in store experience.

This isn't to say other categories probably have much better local options. For myself, I've rarely purchased bike parts on the internet unless I'm completely sure its a good deal. My local bike shops tend to have what I want, or they can special order it for me and its still pretty close to cost.

What is Walmart's % of US retail market?

Almost 11% in 2011 [1], about the same as it is today.

1. http://www.reuters.com/article/2011/08/16/us-walmart-idUSTRE...