Kindle Shares by Malcolm Berko on Creators.com

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Kindle Shares

Dear Mr. Berko: I'm impressed with Amazon's Kindle DX. I think this new device can really help Amazon's earnings take off. I don't have much money, but I can scrape together about $4,000 and buy 50 shares. I'd do it because I think the stock could move from the current $132 to $150 in the next year. Please tell me if you agree or disagree and please tell me why. — W.P, Wilmington, N.C.

Dear W.P.: Well, stone the crows; another absolutely useless gizmo, with zero social value, touted by Corporate America. The original Kindle was a washout. The Kindle 2 replaced the original Kindle and featured a 6-inch diagonal screen with a 16-level grayscale display and is offered by Amazon (AMZN — $132) at $299. It has a text-to-speech option, 1.4 GB of useable internal memory, holds about 1,500 non-illustrated books and has an SD memory card. Last June, AMZN released the new Kindle DX that retails for $489. It contains an accelerator, automatically rotating pages, 3.3 GB of useable storage capacity, a 9.7-inch display with 1,200 x 824 pixel resolution, a four-day battery life and a host of other extremely necessary and very important techno goodies.

The Kindle is as useful as a bucket of rusty nuts and bolts. And like most consumer gadgets with an array of zillions of microchips teeny enough to do push-ups on the head of a pin, it's far from goof-proof, so heaven help you if you dare press the wrong key. And if you drop a bowling ball on it, bury it in the sand, dunk it in the bath tub or leave it out in the summer sun, the thing goes on the fritz and frizzles and frazzles. AMZN is basically trying to design a better mousetrap to solve a non-existing problem. Novels have a superb delivery system — it's called a "book." I can pass a book to a friend when I'm have finished, I can run it over with my car, make margin notes, highlight passages, Xerox pages and mail it in a simple envelope.

I can also buy signed first editions for my collection and if I really like the author, I can put it on my library shelf. Meanwhile, I can buy 60 paperbacks or 30 hard-covers for just the cost of me to own this silly thingamabob!

Some folks will buy the Kindle DX because it's a new gadget and some will buy it because it's a status symbol. I doubt that many serious readers, folks who read books rather than watch TV, would deign to own a Kindle DX. And considering that we are experiencing an obvious and continuing dumbing down of America (fewer Americans know how to read), Kindle will have limited retail appeal.

Kindle will have a marginal effect (if that much) on AMZN's revenues and it is certainly not a reason to own AMZN. Some analysts think that AMZN may over-allocate its resources promoting Kindle, which could be a drag on the company's resources. These analysts also suggest that the $499 cost plus the fees to purchase titles puts Kindle out of reach for most families with school children and college students who are being pummeled by unnecessary increasing tuition costs. And while AMZN currently pays for Kindle DX's wireless connectivity, there may soon come a time when AMZN will have to pass that cost to the consumer.

I like AMZN. I think it's a well-managed company and I believe that earnings can double from this year's $1.70 to $4.00 by 2014. However, I think that you've got to be dumber than a Raphus cucullatus to pay 50 times earnings, so I'd wait for a market pullback before buying the stock. Certainly, this device will not kindle Amazon's earnings.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.