Tesla stock

That might be worthy of its own thread, since I’m kinda wondering how one would go about it.

How do governments control a currency whose very purpose has always been to prevent governments from controlling it in the first place?

 

I *still* think the TSLA market cap is far too high...even with the dip. If you believe in the bull narrative, then I wish you well. However, something was going to give at some point. As with anything, those that got in early are still sitting pretty...the majority that bought the narrative though are probably underwater to some extent. At least it's not as bad as crypto though...but that's another discussion.

Not a fan of Elon either ( fight me ) or the Elon cult. However, one can't deny his success...on the backs of others.

 

it's usually political.

 

of course, i have no idea. but the government can criminalize most anything they want, with supreme court approval.
and the irs has all kind of powers.

 

YET ANOTHER thread topic!

I’m not a cultist either, but I’m a little curious about the “on the backs of others” comment.
Which company?
Berger’s “Liftoff” offers some early Space-X insights and tickles the world of dot.gov funding a little bit, but other than the usual tax giveaways and TIFs I’m not aware of Tesla, a public ally traded company, getting loads of government cheese.
Certainly not as much as some others I can name.
Space-X, a NOT publicly traded company, was given some seeding by dot.gov but it is safe to say that we’ve realized much more of an ROI than some of the other rocket (and not rocket) programs….and were it not for Space-X what kind of access would we have to LEO and beyond?
Russia?
China?
NASA?

I’m not a Musk shill.
He’s like a cat.
He’s sorta transactional, sorta sociopathic, and he has that cat-like ability to saunter into a room looking oh-so-cool only to drop down in the middle of the room and start licking his own backside.

Read any 3 quasi-accurate books about Edison (or Ford? Jobs?) and you will see kindred spirits.

YMMV

 

agreed. genius is genius, and sausage making ain't always pretty

 

Companies with great products and a large TAM often have a price that seems way too high for a long time, such as Amazon, Netflix, Apple, Google, etc. Normal valuation methods don;t really work until much later in their growth cycle. Tesla is still growing fast.

There shouldn't be any comparison between crypto and Tesla. Tesla just opened two new factories that will more than double their profits. Did bitcoin just double their capacity? Oh wait, that would drop the price of bitcoin, wouldn't it?

Mike

 

Boy you guys are *touchy*..haha. Pretty much what I expected with my comment. People idolize the guy almost with a cultlike zeal...and I believe Elon just isn't the great person he makes himself out to be. Not denying that he isn't a great manipulator though. It's what he does... The "backs of others" is a bit harsh...but I've heard the guy is a bitch to work for ( no surprise ), and seems to give his engineers and workers very little credit. In fact he just disparaged his American workers the other day...basically calling them lazy compared to Chinese workers. What a F'n tool! Frankly, not the way a business leader should be acting...

And I firmly believe the TSLA's market cap is WAY out of touch...which I think(?) is supposed to be the theme of this thread. As an active stock trader, I certainly get the 'growth' narrative up to a certain extent...but it must have some link to reality. It doesn't right now. And yes, I have traded TSLA multiple times...

My opinions, of course. Also, I am known to be a contrarian sometimes...and I don't always buy the bull narrative. Can you tell?

 

and yet, he never seems to lack for workers...

i have no idea what kind of person he is, but he's obviously flawed in some areas.

what companies don't make money off of the backs of their workers? it's the nature of the beast.people have choices, especially these days.
door dash is doing a lot of advertising for workers.

which auto ceo are you holding up as an example of integrity?

(disclaimer: i have never held tesla stock. unfortunately)

 

Capacity is one thing. But producing and selling cars is the real test. How big will the market for EVs be? How many families have charging at home capabilities? How many can afford to pay 30-50% more for an EV? How will the governments in the countries/states with factories react over time? What happens when one of their traditional big employers struggles? What happens when a series of companies who have traditionally produced cars start selling their cars? Do the margins go down? What happens if recession hits or deepens? What happens if people start hording their money? What happens if the electric grid is involved in a quiet war?

 

All are great questions which most rational people would say are difficult to answer. Musk apparently sold off as much Tesla stock as he could to buy Twitter
Musk sells $8.5B in Tesla stock as he readies to buy Twitter - ABC News (go.com)

That is why many prefer diversification rather than tying their fortunes to a specific stock. Not putting your eggs all in one basket.

Here is the current breakdown of the Vangaurd Index 500 ETF top ten holdings. It also owns Tesla but in a sensible proportion to other companies to spread the risk of investment. Tesla while an exciting company might be a small part of a sensible investors Porfilio but certainly not an overwhelming portion. This is my opinion only, I certainly am a long way off from claiming I am a stock expert or guru. Just a small-town conservative investor sharing his thoughts while waiting for the garden to dry out from an afternoon shower before I can start weeding again.
Vangaurd Index 500 top ten company investments
1 Apple Inc.
2 Microsoft Corp.
3 Alphabet Inc.
4 Amazon.com Inc.
5 Tesla Inc.
6 Berkshire Hathaway Inc.
7 UnitedHealth Group Inc.
8 Johnson & Johnson
9 NVIDIA Corp.
10 Meta Platforms Inc.

 

I would say that the highlighted portion above is a misportrayal of how this fund (and most other S&P 500 indexes) works. There is no conscious 'sensible' element to the proportioning. Rather, it just copies the S&P 500 Index, which in turn is a capitalization-weighted index of large-cap stocks.

I.e. it just follows a fixed formula. Whether or not it is 'sensible' is an outside human judgement, not part of the formula or fund management.

(The above fund's ticker symbol is VOO. Disclosure, I own some of Vanguard's equivalent non-ETF mutual fund, VFIAX. But there is nothing magic about Vanguard's offering, very many other financial outfits offer their own in-house versions.)

 

I own some VOO. It has a very low cost of ownership and it does provide some investment diversification.

JeffD

 

these questions have been asked by skeptics (including myself) for well over 10 years.

they will probably continue to be asked by skeptics ntil the last gasser is decommissioned. and they were probably asked by people who owned horse and buggies

 

These seem to be overly negative leaning questions. Many of which could be asked for any car business, or for that matter, any business at all.

How big will the market for EVs be? I would say a heck of a lot bigger than it is now

How many families have charging capabilities at home? Well, if we assume a powered garage means charging capabilities probably about 40 Million. Of course, more and more multi-unit homes also have charging capabilities. While small in numbers, that will grow in numbers.

How many can afford an EV? Many EVs are priced at, or below the average new vehicle price.

Your questions. About the government apply to any business. There are always uncertainties, and you prepare for them. You don’t stop because something MIGHT make the job challenging.

 

The questions I asked 6 months or so ago were questions that were examined in two articles referring to several papers by academics studying company valuations in the Forbes issue I referred to earlier in this thread. Sorry, copyrighted.

The papers also attempted to quantify other variables such as future global EV market size, percentage of Tesla market share in the future, future per car profit necessary to justify a given current stock price, etc. The papers and articles were not pro-anything or anti-anything, but rather attempts to quantify. In other words, the opposite of the meme stock investing approach.

I live in a county that had an average family income of $52k in 2020. Most families have two incomes to provide that. Most families drive used cars or pickups. So I asked that "who can afford" question partially from that experience. The articles I referenced attempted to define a possible answer as one of factor in their quantification of the potential market.

 

The people supplying those used ICE cars will be the ones that can afford new EVs. Car companies aren't in the business of making cars for the used car market. Your experience doesn't apply to how car companies become successful.

ICE cars were beyond the reach of most people when they first came out. Ford Motor Company was not Henry Ford's first car company. The affordable ICE cars did come. So will the affordable EVs. Some are already here, and they are more affordable in other markets.

For those that can't afford new ICE cars now, they will have to wait used EV to reach the used market. The fact that they can't afford new ICE hasn't kept used ICE from coming to market.

 

it's easy to get caught up in your own surroundings and personal experience, but nationwide and worldwide, the market is complex, and there is a lot involved in product viability decision making