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Yoshikami: Should Amazon Investors Panic?
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Amazon missed earnings expectations as revenue was strong but margins decreased as new products were rolled out and infrastructure investment was expanded. Amazon had warned that the third quarter would likely be soft but analysts were still feeling particularly optimistic given the rollout of the Fire tablet.

And so the numbers were released and Amazon stock is down . And what should your view be?

If you are investing for more than a one-year time horizon, the capital infrastructure hits that this company is taking on the short-term will be of great benefit in future quarters. Not only has the development costs of the tablet laid the groundwork for a delivery device to siphon off more retail purchases from competitors, but the company has chosen to embark on an infrastructure program to improve its' product processing capabilities.

Analysts have ALWAYS been concerned about the net profit of Amazon. We have always been concerned about this metric as well. The tendency is to price a company and its' future potential cash flow and to have that model be impacted greatly by the present quarter's numbers.

But Amazon has always been more about growing revenue and market share and less about profit. The Amazon Prime program was widely criticized as a margin killer as it provides free shipping and increased costs for the retailer. But over the long-term, this program drove additional business to Amazon and is now seen as a loyalty program which drives revenue.

Jeff Bezos is not interested in growing a money-losing business. Great market share with zero profits is bad business. But if transitions which require capital expenditures can drive future revenue growth, than investors who have a longer-term perspective might be rewarded with higher margins.

Amazon clearly is looking to grow share and is not anywhere near maturity as a business. The expansion into media and the cloud is a costly yet important initiative as the company seeks to be a go to destination for connected devices. And the business cloud services division of Amazon continues to grow at a record pace.

Just recently in a discussion with a prominent Silicon Valley executive, I asked the question "Who is best positioned to capture opportunity as businesses moves to the cloud?". His response was that while there are many competitors, only a few will likely succeed; and one of them was Amazon.

As we listened to the conference call and read the earnings report, I can understand why the stock sold off on the short-term. Its pretty simple really; less profit. But if you see the opportunity for this company in the long term, today's selloff might just be an opportunity for entry. This is not to say that it won't fall further; it could. But understanding the mindset behind Amazons decisions can help you recognize that they are focused on the long-term and capturing share, not just on short-term profits.

Michael Yoshikami, Ph.D., CFP®, is CEO, Founder and Chairman of YCMNET's Investment Committee at . Michael is a CNBC Contributor and appears regularly on the network. YCMNET is a San Francisco Bay Area-based independent money management firm that provides fee-based wealth management services to institutional investors and individual investors. The firm works with clients around the world. Michael was named by Barron's as one of the Top 100 Independent Financial Advisors for 2009, 2010 and 2011. He oversees all investment and research activities of the firm and is actively engaged on a daily basis in the firm's securities analysis activities and determines the macro tactical asset allocation weightings for client portfolios. He works with YCMNET's investment team in integrating behavioral investing strategies with the firm's core fundamental perspective. Michael holds a Ph.D. in education, other advanced degrees, and holds the Certified Financial Planner® (CFP) designation.