Amazon Has Returned a Staggering 38,715% Since its IPO in May 1997

amazon-amzn-logoMost investors know that Amazon.com, Inc. (NASDAQ:AMZN) stock has been a top performer for many years, but its long-term returns really are quite astounding.

Since its IPO in May 1997, the stock has returned about 38,715%. Its initial share pricing of $18 has grown to over $768, a more than 42x return.

Not bad for a company that started out selling strictly books.

Buying and holding AMZN shares all that time would have required some real patience and faith, however. Pension Parnters’ analyst Charlie Bilello recently pointed out just how bad some of the years have been:

Amazon: Total return since its IPO in May 1997: +38,715%. That’s over 36% annualized…$AMZN pic.twitter.com/QgdZSj9rQG

— Charlie Bilello, CMT (@MktOutperform) August 4, 2016

Along with the 80% decline in 2000 and 30% loss in 2001, “You would have had to hold through a 94% max drawdown from December 1999 to September 2001,” Bilello adds.

Who among us would have had the gall to hold such a high-flying tech stock during the dot-com bubble implosion? Or how about the 40% pullback during the financial crisis?

With how well the company has been performing lately, it’s hard to imagine Amazon ever pulling back like that again. But history tells us it will — along with the rest of the markets. A bear market is coming eventually, and in most cases the baby is thrown out with the bathwater. Even the best companies can suffer big losses when selling hysteria takes hold.

Investing always seems simple in hindsight, but staying the course in the face of such market panics is much easier said than done.

Amazon shares rose $2.81 (+0.37%) to $769.37 in Tuesday afternoon trading. AMZN has gained 13.75% year-to-date, nearly doubling the return of the S&P 500 in the same period.

AMZN-2016-08-09

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