Bezos Selling $5 Billion of AMZN stock

JC Parets
July 8, 2024

I don't know if you heard, but Jeff Bezos is reportedly selling $5 Billion worth of $AMZN stock.

And I'm being told how bearish this is and why we need to sell all our Amazon stock as well.

"He knows something, which is why he's selling so much of his stock"

In my experience, this bad take is only because some people think $5 Billion is a lot of money.

And maybe it is to you.

But $5 Billion is almost zero when it comes to someone like Jeff Bezos.

Bear with me for a second, let me put y'all on game.

Bezos is worth approximately $215 Billion.

Currently, $187 Billion of that is in Amazon stock (about 87% of his net worth).

Can someone please explain to me how Bezos selling 2.5% of his shares, lowering his exposure to “only” $182 Billion in $AMZN is bearish?

The answer is that it is not.

It's just a distraction.

In fact, Amazon is completing a multi-year base and breaking out to new all-time highs.

My bet is that this rotation into Consumer Discretionary continues. Look at Discretionary relative to the S&P500 here plotted below $AMZN:

Amazon represents over 23% of the entire Consumer Discretionary Index.

For additional context, Tesla represents another 15% of the index.

Here is a chart of Discretionary vs the S&P500 with momentum plotted below it (using a 14-day RSI).

I see a brief dip below those late 2022 lows, and swift recovery.

This was also accompanied by a bullish divergence in momentum:

The bottom line is this: We want to stay long $AMZN.

We want to be overweight Consumer Discretionary and continue to look for stocks in the Discretionary space to add to our portfolios.

Look at Ferrari, for example.

I'm being told that consumers are broke and can't afford anything.

But Ferrari is consolidating new all-time highs, setting up for its next leg higher, in my opinion:

I would encourage you to go through the entire list of Consumer stocks.

You have huge winners like Dick's Sporting Goods, Walmart, Costco, Wingstop, Cava, Texas Roadhouse and others who continue to dominate in this environment.

But you have other Consumer stocks where money is rotating into that we also want to take advantage of from the long side.

We discussed them all during our LIVE Conference Call last week.

Make sure you check out the video replay, download the 150+ charts and review each of the new trade ideas.

Premium Members check it all out here.

JC

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