Bezos' Dot-Com Lesson: Focus on Fundamentals, Not Stock Price

Jeff Bezos' leadership during Amazon's early years is often cited as a key factor in the company's success. When Amazon went public in 1997, its stock price skyrocketed to $113, but then plummeted to near $6 during the dot-com crash of 2000. Many would have given up or tried to artificially prop up the stock price, but not Bezos.

In a Q&A session last year, Bezos explained that despite the decline in stock price, Amazon's business fundamentals remained strong. 'The number of customers went up every month,' he said. 'Our gross profits went up every month... Our losses as a percentage of sales went down every month.'

Bezos' approach was to focus on building a sustainable business model with a wide moat that serves a universal market with lots of repeat business. He believed in the importance of patience and waiting for success, which is evident from Amazon's history.

The key takeaway from Bezos' experience is that the stock price is an output that can be disconnected from the company's fundamentals. Investors should look beyond the noise and focus on identifying companies with true staying power and a sustainable business model.