Wishful Thinking Dept.?

Let me not dwell on what I imagine wound up being a tragedy in the House of Representatives this weekend and return to the other tragedy in my life.

My short sale.

So here is Amazon back in the 285 range as I write Friday afternoon (400 as you read Monday morning?) – up from 24-and-change earlier this year – and I do have this thought: Is it possible that some of those investors looking for year-end tax losses to balance out gains are covering their short positions in Amazon, helping to drive up the stock? And is it possible that those who have huge gains in Amazon are figuring they’ll put off the tax bite a year by waiting a few weeks, until January, to sell?

I actually doubt this is a very big factor in today’s price, but it might be a little of the explanation. When you’re short a few shares, as I am, you will grasp at any straw.

Meanwhile, I just took a look at www.booksamillion.com (whose own stock, BAMM, has been a source of thrills and chills), where Tom Wolfe’s best-seller, A Man in Full, goes for $15.63. The same book is $20.26 at Amazon, or 29% more. Across the board, Books-A-Million prices beat Amazon’s, and by a pretty wide margin. (You do have to pay a $5 membership to get the best discount, however.) Personally, I would rather pay Amazon an extra few dollars with every order, because they’re nice people and, frankly, because I feel sorry for them. As most people know, they’re still losing money. Also, to be fair, once you include the $3.95 shipping that both charge, it’s really barely 23% extra you’re paying. And what’s 23% extra among friends?

I firmly predict that Amazon’s customers will always be happy to pay 20% or even 29% more than they have to, for one simple reason: They all own the stock.

Seriously … Amazon does do an awfully good job. And Books-A-Million – and others – may not be able to undercut it forever. Then again, a big part of the price difference would appear to be this: BAMM gives YOU the extra discount rather than rebating it to “associates” who funnel business their way. (Me, for example – at andrewtobias.com.) So the price differential may be supportable after all.

To some, it’s actually worth a few extra bucks to be able to click a book title and go straight to “one-click” check-out at Amazon or Barnes & Noble and be done with it. If it saves two minutes, that can be a big deal. Nothing is more precious than our time. But others may choose to spend the extra two minutes to save $4, or even $1. After all, even $1 for two minutes is $30 an hour, tax free. That’s like earning $90,000 a year.

Anyway, the incredible Amazon saga continues. I continue to root for the company but not the stock. And I note with awe and fascination just how far the little sucker has come since I first wrote about it here, two and a half years ago. An analyst at Oppenheimer now predicts it will earn $10 a share in five years. So today you can snag it for just 29 times hoped-for-earnings. Just sit tight for five years, and if he’s right, the stock could then actually be worth today’s price.

To those of you who do own Amazon (Dorothy – do you still have it?), hats off to you. And don’t forget to drop a share or two into the Salvation Army bucket.