What a rollercoaster ride Amazon.com (Nasdaq: AMZN) has been on! The Internet retailer came public in May 1997 at a value near $500 million. In less than three years, it exploded to a price tag of $35 billion. At that height, Amazon.com had risen 70 times. Today, however, the e-retailer has run up against investor skepticism. Its stock price has fallen from $113 to as low as $30 per share, marking a decline of more than $20 billion in value. The question is: What can we learn from all this?

For me, the primary lesson is simply that rapid-growth companies in dynamic industries should be expected to see prices zig and zag ferociously. Multiple rises matched with 50-75% declines are the norm. Don't imagine that a stock's volatility -- up and down -- provides an ongoing pure reflection of the business' merit. I suggest only investing in these sorts of businesses if you're ready for volatility and willing to lose out en route to finding a few gems.

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