From the Desk of Irwin Michael – September 9, 2016: Amazon.com As mentioned in the January 2016 edition of The ABC Perspective, there have been many far-reaching economic, technological and social changes that have transformed the global investment environment. The newsletter’s front-page headline was “Investing in the New World”. In this “new world”, millennials are the largest demographic cohort, baby boomers are reaching retirement, and many consumers and businesses are making the bulk of their purchases online via e-commerce. Accordingly, we positioned the ABC Funds’ portfolios to capitalize on these key macro trends. ABC Funds’ holding, Amazon.com, is an excellent example of a company that is benefiting from the growth and development of e-commerce. Amazon has performed well this year, up 16% YTD and this week has reached a fresh all-time high. This e-commerce giant is particularly attractive due to its strong free cash flow and long-term growth prospects that are showing remarkable promise. For instance, Amazon Prime memberships have been a focal point in Amazon’s success. There are now an estimated 63 million Amazon Prime members in the US who subscribe to the $99/year membership service. Amazon Prime members enjoy free two-day shipping, unlimited photo storage, and access to Prime Video and its large selection of movies and TV shows. Not only has Amazon Prime created a new channel of revenue for Amazon, but also, it has spurred increased customer loyalty. On the cloud computing services front, Amazon’s cloud suite, Amazon Web Services (AWS), has emerged as the clear leader. Currently, AWS offers over 70 wide ranging services, including storage, databases, enterprise applications and analytics, which are of great value to businesses. AWS continues to grow revenues at a staggering pace, despite its current substantial market share. As businesses continue their migration toward cloud computing integration, Amazon is well-positioned to capitalize on this trend. In summary, we believe that Amazon.com is poised to build on its extraordinary run and maintain its leading position among retailers. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.