The following is an excerpt from the June 1, 1999 Rule Breaker Portfolio.

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June 8, 1999

Amazon.BOMB? Not Likely.
by David Gardner (MotleyFool)

Amazon lost 10% of its value on June 1st ostensibly in reaction to the predictable routine jab from Barron's. Predictable? Certainly. Every 3-4 months, that august retro-thinking publication singles out Amazon for strongly-worded, misplaced mockery. That mockery was a bit more strongly-worded than usual this time around -- putting "AMAZON.BOMB" on the cover, with a scary cartoonish depiction of founder Jeff Bezos's face sitting inside a bomb.

The sheer lack of wit of the title reminds me of sports fans who (for instance) say things like "the Boston Red Sux," instead of "the Boston Red Sox." It's the easy tweaking of a name to express easy criticism. It would be as if I titled today's writeup mentioning Barron's this way:

Bear-On's Wrong Again

It is my hope, discriminating reader, that you would think less of me for using such a title, just as I think less of any publication that hopes to stay relevant when it goes 36-point with "AMAZON.BOMB." Perhaps my point is too subtle, or hazily conveyed. I hope not.

Have I read the Barron's article? No, I have not. And I doubt I will. Without being bullheaded about this, I expect that they make the same points they always do, about low barriers to entry ("anyone can do this"), insurmountable competition, incalculable P/E ratio, and "Net frenzy." In other words... the very same points that Barron's consistently makes in criticism, starting with America Online back in 1994. (You know the result, since.)

Of course, if you find something compelling about the article that is outside of these (or the few other criticisms consistently leveled at the company since it came public in 1997), please contribute those to our Rule Breaker Portfolio message board. I enjoy thinking about this stuff, and I particularly like challenges to my thinking as I Foolishly maintain an open mind, as always. The regular arguments, though, will not suffice. They were made just as repetitively and passionately two years ago when we bought Amazon at $6 1/2, and are therefore quite obviously irrelevant to the market's thinking.

Though the stock has been halved in the past month, it remains up some 15 times our purchase less than two years ago.

Remember that cover stories like the one this weekend have, in the past, been fantastic contrary indicators. If this tradition continues, Amazon.com would be a sweet buy today at $106.

And Amazon.Bomb? Gimme a break. No time soon.

Next -- Louis Corrigan on Amazon's Flow