Tesla for the long run?

[RetiredAtThirty-eight]

https://www.investopedia.com/terms/g/greaterfooltheory.asp

In the vast majority of these cases, the greater fools eventually stop showing up. So be sure to sell to the last one who arrives.

I'm not sure why you refer to those of us who invested in the fast growing company "fools" and the people we sell to "greater fools". Buying stock in innovative, fast growing companies is a proven and well-established method of building wealth over time.

The fact that you think it's "over-valued" just means that you won't be a TSLA investor. But the reason many people are willing to pay the asking price is because they have calculated the superior growth over time is worth the asking price. If their analysis changed, they would sell.

These are not fools buying TSLA stock, they are very smart people who know how to make money by buying extremely innovative and profitable companies. People like billionaire Ron Baron, top-performing fund manager Cathie Wood, billionaire venture capitalist Chamath Palihapitiya, Larry Elllison, etc. etc. etc.

The list of shareholders who have a proven ability to invest successfully is long, their positions are not small and these people all believe in the underlying value of Tesla, they are not investing to sell "to a greater fool". They are not reducing their positions, even at these elevated levels. That should tell anyone with a modicum of intelligence something.

I tried to share this knowledge with the fine people here on early-retirement.org when it was 1/10th the price it is now but was met with derision and dismissed. Too expensive, too risky, going bankrupt people said with a straight face. And, yes, the "greater fool" theory was presented. So I left.

But I didn't listen to the naysayers here because I realized they hadn't done the homework I had done. I'm also a very experienced investor of over 30 years. I remained firm in my convictions that were founded on literally hundreds of hours of in-depth research, from their balance sheets to their products. And I'm glad I did because I have realized profits measured in the seven digits and unrealized profits of over three times as much. But if you want to call me a fool I'm OK with that. Because I know myself pretty well and calling someone a fool does not make it so.

 

[RetiredAtThirty-eight]

It isn't much fun though buying a stock that is priced for perfection. So many things can go sour. Tesla may end up earning this price in a few years/decades but I would rather buy a stock that has good prospects yet is priced for failure. Better risk/reward.

Most promising companies are valued to reflect that promise. Can you give one example of what you are talking about? I'm always looking for good investment ideas and I take full responsibility for my decisions so, of course, I wouldn't hold you responsible it it turns out to not be as good as you thought.

So, what company has good prospects but is priced for failure?

 

[OldShooter]

I'm not sure why you refer to those of us who invested in the fast growing company "fools" and the people we sell to "greater fools". Buying stock in innovative, fast growing companies is a proven and well-established method of building wealth over time.

The fact that you think it's "over-valued" just means that you won't be a TSLA investor. But the reason many people are willing to pay the asking price is because they have calculated the superior growth over time is worth the asking price. If their analysis changed, they would sell.

These are not fools buying TSLA stock, they are very smart people who know how to make money by buying extremely innovative and profitable companies. People like billionaire Ron Baron, top-performing fund manager Cathie Wood, billionaire venture capitalist Chamath Palihapitiya, Larry Elllison, etc. etc. etc.

The list of shareholders who have a proven ability to invest successfully is long, their positions are not small and these people all believe in the underlying value of Tesla, they are not investing to sell "to a greater fool". They are not reducing their positions, even at these elevated levels. That should tell anyone with a modicum of intelligence something.

I tried to share this knowledge with the fine people here on early-retirement.org when it was 1/10th the price it is now but was met with derision and dismissed. Too expensive, too risky, going bankrupt people said with a straight face. And, yes, the "greater fool" theory was presented. So I left.

But I didn't listen to the naysayers here because I realized they hadn't done the homework I had done. I'm also a very experienced investor of over 30 years. I remained firm in my convictions that were founded on literally hundreds of hours of in-depth research, from their balance sheets to their products. And I'm glad I did because I have realized profits measured in the seven digits and unrealized profits of over three times as much. But if you want to call me a fool I'm OK with that. Because I know myself pretty well and calling someone a fool does not make it so.

Wow. Quite a blast. You missed the point that years of history prove you wrong. Your thirty years (I have fifty) means you missed the "Nifty Fifty." These were stocks that were said to be buys at any price and lifetime holds. Here's how that worked out: "These fifty stocks are credited by historians with propelling the bull market of the early 1970s, while their subsequent crash and underperformance through the early 1980s are an example of what may occur following a period during which many investors, influenced by a positive market sentiment, ignore fundamental stock valuation metrics. Most have since recovered and are solid performers, although a few are now defunct or otherwise worthless." https://en.wikipedia.org/wiki/Nifty_Fifty Then there was the tech bubble: "Between 1995 and its peak in March 2000, the Nasdaq Composite stock market index rose 400%, only to fall 78% from its peak by October 2002, giving up all its gains during the bubble. During the crash, many online shopping companies, such as Pets.com, Webvan, and Boo.com, as well as several communication companies, such as Worldcom, NorthPoint Communications, and Global Crossing, failed and shut down." https://en.wikipedia.org/wiki/Dot-com_bubble

The point is that this kind of stuff happens all the time. Some people get lucky and win, others lose their shirts. Usually the problem boils down to people thinking that a good story, or even a good company, is a good investment at any price. That's clearly not true. There is nothing new under this sun.

It's great that you have done fundamental research; Ben Graham would be proud.* Have you tried to infiltrate employees into JD Power? Are you tracking car registration data from all fifty states? Do you have employees outside of all Tesla facilities, counting employee cars, monitoring inbound materials shipments, and watching outbound finished goods? (I didn't think so.) The pros have all this and more. The information you are able to find (unless you're cheating with illegal insider information) is the same information everyone else has. From Rick Ferri's "All About Asset Allocation" : "There is a classic saying on Wall Street, 'What everybody already knows is not worth knowing.' "

You got lucky. Good for you and congratulations. Before you conclude from that that you are a genius, I suggest that you read Nassim Teleb's "Fooled by Randomness."

Edit/forgot to ask: "The list of shareholders who have a proven ability to invest successfully is long .." I know of no data and no research that would support this statement. Please provide a link or a citation. Not anecdotes, please. It is easy to compile a list of lucky people.

---------------------------------------------------------
*Here are a couple of Ben Graham comments on your strategy:

(in "The Intelligent Investor"): " ... we hope to implant in the reader a tendency to measure or quantify. For 99 issues out of 100 we could say that at some price they are cheap enough to buy and at some other price they would be so dear that they should be sold. The habit of relating what is paid to what is being offered is an invaluable trait in investment. In an article in a women’s magazine many years ago we advised the readers to buy their stocks as they bought their groceries, not as they bought their perfume. The really dreadful losses of the past few years (and on many similar occasions before) were realized in those common-stock issues where the buyer forgot to ask “How much?"

Ben Graham, 1976 interview a few months before his death: " ... I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook "Graham and Dodd" was first published; but the situation has changed a great deal since then. In the old days any well-trained security analyst could do a good professional job of selecting undervalued issues through detailed studies; but in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. To that very limited extent I'm on the side of the "efficient market" school of thought now generally accepted by the professors."

 

[RetiredAtThirty-eight]

Wow. Quite a blast. You missed the point that years of history prove you wrong. Your thirty years (I have fifty) means you missed the "Nifty Fifty." These were stocks that were said to be buys at any price and lifetime holds. Here's how that worked out: "These fifty stocks are credited by historians with propelling the bull market of the early 1970s, while their subsequent crash and underperformance through the early 1980s are an example of what may occur following a period during which many investors, influenced by a positive market sentiment, ignore fundamental stock valuation metrics. Most have since recovered and are solid performers, although a few are now defunct or otherwise worthless." https://en.wikipedia.org/wiki/Nifty_Fifty Then there was the tech bubble: "Between 1995 and its peak in March 2000, the Nasdaq Composite stock market index rose 400%, only to fall 78% from its peak by October 2002, giving up all its gains during the bubble. During the crash, many online shopping companies, such as Pets.com, Webvan, and Boo.com, as well as several communication companies, such as Worldcom, NorthPoint Communications, and Global Crossing, failed and shut down." https://en.wikipedia.org/wiki/Dot-com_bubble

The point is that this kind of stuff happens all the time. Some people get lucky and win, others lose their shirts. Usually the problem boils down to people thinking that a good story, or even a good company, is a good investment at any price. That's clearly not true. There is nothing new under this sun.

It's great that you have done fundamental research; Ben Graham would be proud.* Have you tried to infiltrate employees into JD Power? Are you tracking car registration data from all fifty states? Do you have employees outside of all Tesla facilities, counting employee cars, monitoring inbound materials shipments, and watching outbound finished goods? (I didn't think so.) The pros have all this and more. The information you are able to find (unless you're cheating with illegal insider information) is the same information everyone else has. From Rick Ferri's "All About Asset Allocation" : "There is a classic saying on Wall Street, 'What everybody already knows is not worth knowing.' "

You got lucky. Good for you and congratulations. Before you conclude from that that you are a genius, I suggest that you read Nassim Teleb's "Fooled by Randomness."

Edit/forgot to ask: "The list of shareholders who have a proven ability to invest successfully is long .." I know of no data and no research that would support this statement. Please provide a link or a citation. Not anecdotes, please. It is easy to compile a list of lucky people.

---------------------------------------------------------
*Here are a couple of Ben Graham comments on your strategy:

(in "The Intelligent Investor"): " ... we hope to implant in the reader a tendency to measure or quantify. For 99 issues out of 100 we could say that at some price they are cheap enough to buy and at some other price they would be so dear that they should be sold. The habit of relating what is paid to what is being offered is an invaluable trait in investment. In an article in a women’s magazine many years ago we advised the readers to buy their stocks as they bought their groceries, not as they bought their perfume. The really dreadful losses of the past few years (and on many similar occasions before) were realized in those common-stock issues where the buyer forgot to ask “How much?"

Ben Graham, 1976 interview a few months before his death: " ... I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook "Graham and Dodd" was first published; but the situation has changed a great deal since then. In the old days any well-trained security analyst could do a good professional job of selecting undervalued issues through detailed studies; but in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. To that very limited extent I'm on the side of the "efficient market" school of thought now generally accepted by the professors."

Aren't you the same "OldShooter" that claimed TSLA was overvalued and tried to say I didn't know what I was talking about when I spoke well of it as an investment on this very forum last year?

I'll remind you that it was priced at only $70/share at that time and is now over $700/share.

You can call it luck, whatever. Maybe I've just been "lucky" over the last 30 plus years. I'm OK with you thinking that if it makes you feel better. I'm much closer to my own situation and I know a little more about it.

 

[MichaelB]

Why don’t you guys take it somewhere else?

 

[RetiredAtThirty-eight]

Why don’t you guys take it somewhere else?

Thank you! I appreciate that.

 

[RetiredAtThirty-eight]

Tesla appears to be one of those very rare, truly disruptive companies.
As such, part o their future worth is asked on ow quickly other companies also jump into the newly created market.
Tesla is still working on expanding worldwide. While risk goes down as they build additional manufacturing plants, they are highly volatile.

Inclusion in the S&P500 will add a lot of buying pressure (maybe it already has?).
Lackluster competition has allowed Tesla to be a very strong presence.
That could change, but I don’t think it will.

Tesla is also becoming a major player in some energy markets.

If you are looking for a ‘sure thing’ or a smooth increase in stock prices over 5-10 years, stay clear of TSLA.
If you are looking for getting into a company that has the potential to disrupt a couple of industries, and can deal with volatility, I’d say TSLA is worth looking at.

I am long TSLA, and love driving their cars (Model Y owner).

That was a good call Zathras!

Tesla just hit the target Elon Musk set in 2014 of 1/2 million cars produced/sold in 2020. And he did it in the year of the pandemic! Simply stunning execution and vision! It's been a great run the last two years.

TSLA is now in most peoples retirements accounts as 1.6% of the S&P500 so becoming more mainstream. In a way I find this sad because it means the years of 700% gains are probably over.

Oh well, it was good while it lasted. I hope some other early retirement folks got in on this incredible run! TSLA is still a good long-term investment but we are unlikely to see any more 700% percent gains in only a years time!

 

[tulak]

Tesla just hit the target Elon Musk set in 2014 of 1/2 million cars produced/sold in 2020. And he did it in the year of the pandemic! Simply stunning execution and vision! It's been a great run the last two years.

I'll start by saying I have a lot of respect for Musk. He's built two great companies: SpaceX and Tesla. It's amazing how successful he's been and I hope it continues going forward.

Having said that, 500k cars might be impressive, but when compared to other car manufacturers, not really. Especially at their current valuation. The energy business, also great, but how much is it adding to the bottom line?

In my view, the current stock price is not representative of the underlying business. I'm betting that the stock is driven by momentum more than anything else. Too many people making money on this stock since it keeps going up. That can't last for ever. On a fluke, I decided to buy one year Tesla puts. I might regret this decision, but at its current price, I'm willing to make a small bet.

 

[MRG]

That was a good call Zathras!

Tesla just hit the target Elon Musk set in 2014 of 1/2 million cars produced/sold in 2020. And he did it in the year of the pandemic! Simply stunning execution and vision! It's been a great run the last two years.

TSLA is now in most peoples retirements accounts as 1.6% of the S&P500 so becoming more mainstream. In a way I find this sad because it means the years of 700% gains are probably over.

Oh well, it was good while it lasted. I hope some other early retirement folks got in on this incredible run! TSLA is still a good long-term investment but we are unlikely to see any more 700% percent gains in only a years time!

Some of us did. Thank you for helping me understand. After buying a performance Y I bought some shares. I understand why Tesla doesn't have/need a marketing department. I've told several people to not drive one unless you are willing to buy.

 

[Ready]

A lot of people who invested in Tesla stock early have done quite well financially. Which apparently has led them to begin an active discussion on the Tesla Motors Club Forum on how to know when you are ready to retire. It makes for an interesting read.

https://teslamotorsclub.com/tmc/threads/when-to-retire.202292/

I was not one to invest in Tesla stock. I should have after buying two Model 3’s and realizing what amazing vehicles they are. But I’ve never been an individual stock investor, so I missed out.

 

[Blue531]

We are talking about a stock that has gone up by a multiple of over a 150x in the last 10 years. Since it is really getting going now on so many fronts, it's very possible to have years of significant growth and price increase.

 

[tulak]

We are talking about a stock that has gone up by a multiple of over a 150x in the last 10 years. Since it is really getting going now on so many fronts, it's very possible to have years of significant growth and price increase.

Tesla has the 7th highest market cap for US companies. P/E is over 1450. How much higher can it go?

And then you have competition ramping up: https://finance.yahoo.com/news/stockbeat-norway-gives-sobering-look-055942082.html

 

[Texas Proud]

Not sure the exact amount but I heard Tesla was at $700 billion market cap..


SO,



700,000,000,000 / 500,000 cars is a market value PER CAR of...


$1,400,000....


kinda high for a company that sells cars for less than $100K each... and the profit for each is less...


Not sure how much of their revenue is cars, but I bet it is way over 50%....




Edit to add... by default I actually own some Tesla.... now probably more since it is in the S&P 500 even though I do not have a MF of the 500 I do have growth funds...

 

[RetiredAtThirty-eight]

I'll start by saying I have a lot of respect for Musk. He's built two great companies: SpaceX and Tesla. It's amazing how successful he's been and I hope it continues going forward.

Having said that, 500k cars might be impressive, but when compared to other car manufacturers, not really. Especially at their current valuation. The energy business, also great, but how much is it adding to the bottom line?

In my view, the current stock price is not representative of the underlying business. I'm betting that the stock is driven by momentum more than anything else. Too many people making money on this stock since it keeps going up. That can't last for ever. On a fluke, I decided to buy one year Tesla puts. I might regret this decision, but at its current price, I'm willing to make a small bet.

I understand your valuation concerns and, if I thought they were valid, I would sell all my TSLA shares immediately.

You really need more than a superficial understanding of the company to understand why the company will likely be worth many times it's current nearly 700 billion dollar valuation by 2025. You can research this elsewhere but, in a nutshell, Tesla is developing into a lean, mean, growth machine with growing margins. Do not look towards the legacy auto companies to determine what Tesla profit margins will be because Tesla does things dramatically different and the margin growth is actually accelerating past the legacy manufacturers, even with much smaller manufacturing volume.

No one can make a competitive vehicle offering similar functionality and performance and sell it for the same price or less. That's why they can sell every car they make as soon as they make it. There is no reason to believe this is about to change. Tesla is a good 5 years ahead of the next closest competitor in terms of how much value they can offer.

Currently, the energy side of the business is of minor significance in terms of revenue and profits relative to the auto side of the business but that is starting to change quickly as the cost curve of solar and battery storage drop into the economical zone as evidenced by very high growth rates in recent quarters. Watch for Q4 2020 earnings and the full year report to be released sometime around January 20th and see how quickly the energy side of the business is growing.

The people bidding up Tesla shares into the stratosphere are not dreamers in a mania (those people don't have enough investable assets to bid it up to $700 billion in the first place). The big buyers are huge hundreds of millions and multi-billion dollar funds run by seasoned pros. Yes, it's possible for TSLA to have a dramatic correction but that's not going to stop it from zooming to new all-time highs and reaching a market cap of 2 trillion, 3 trillion and more after words.

 

[RetiredAtThirty-eight]

Not sure the exact amount but I heard Tesla was at $700 billion market cap.

That's about right, just under $700 billion valuation. I expect it to get to 5 trillion before 2030 and to be the first company to reach a market cap of 3 trillion. That's assuming it's not split up into multiple companies before that happens.

Edit to add... by default I actually own some Tesla.... now probably more since it is in the S&P 500 even though I do not have a MF of the 500 I do have growth funds...

Congrats! You and around 100 million other Americans own a little bit of TSLA through funds that seek to meet or beat the S&P 500 Index. It really is a widely held, all-American growth story. Next year Tesla will make and sell close to double the cars they sold in 2020 and following years will likely see a growth rate of around 50%.

 

[OldShooter]

... zooming to new all-time highs and reaching a market cap of 2 trillion, 3 trillion and more after words.

Considering that the top three stock mutual funds (VFIAX, SPY, FXAIX) in their entirety total a paltry $1trn and the entire US GDP is only $20trn, that will be quite a thing to see. Maybe Tesla will apply for statehood; after all, the GDP of California is about $3trn and of Texas, less than $2trn. Or maybe it could join the UN? GDP of Great Britain is about $3trn. Aren't big numbers fun?

 

[RetiredAtThirty-eight]

Considering that the top three stock mutual funds (VFIAX, SPY, FXAIX) in their entirety total a paltry $1trn and the entire US GDP is only $20trn, that will be quite a thing to see. Maybe Tesla will apply for statehood; after all, the GDP of California is about $3trn and of Texas, less than $2trn. Or maybe it could join the UN? GDP of Great Britain is about $3trn. Aren't big numbers fun?

Well, it's not going to happen over-night and you can bet the GDP's of both Texas and California are set to grow. However, the market cap is a forward-looking metric so most of the valuation will be baked into the company before the factories that enable that kind of production are all complete.

Tesla is aiming for 10 factories the size of their Nevada Gigafactory (or bigger). Both the Texas and Germany Gigafactories are scheduled to be bigger than the Nevada factory.

I am looking forward to watching our cities become cleaner and quieter and America re-gaining some of the lost ground as manufacturing jobs are brought back with the rebuilding of America's energy infrastructure.

Out with the old, in with the new.

 

[NW-Bound]

Considering that the top three stock mutual funds (VFIAX, SPY, FXAIX) in their entirety total a paltry $1trn and the entire US GDP is only $20trn, that will be quite a thing to see. Maybe Tesla will apply for statehood; after all, the GDP of California is about $3trn and of Texas, less than $2trn. Or maybe it could join the UN? GDP of Great Britain is about $3trn. Aren't big numbers fun?

The UN? Even banana republics are in the UN. That's nothing.

I am thinking about Tesla claiming the planet of Mars. Now, that's something!

 

[MRG]

The UN? Even banana republics are in the UN. That's nothing.

I am thinking about Tesla claiming the planet of Mars. Now, that's something!

I thought Musk already did.

 

[NW-Bound]

I thought Musk already did.

Darn! I miss seeing a photo of him planting a flag on Mars. Gotta go search the Web.

 

[RetiredAtThirty-eight]

I bought 20 shares at $227.00 in May 2019, & was afraid I was overpaying I'd like to take some off the table, but due to health care insurance income limitations, I'll probably just let it ride.

As for the OP's question:
If someone put a gun to my head & told me I had to give them my opinion, I'd have to say that anyone buying today $2,236.99 +83.82 (+3.89%) might very well experience this sometime soon.

Actually, that is how my head feels as I try to understand the big numbers on my brokerage account statement.

Price was $2,236.99 when you posted that in August. Current price (adjusted for the 5 for 1 split) is $3,850 for a gain of over $1,600 per share!

 

[RetiredAtThirty-eight]

I thought Musk already did.

You people are funny!

I don't think SpaceX is scheduled to visit Mars until 2026 but there is a small chance it could be accelerated to 2024. I think the orbital mechanics of Earth and Mars only line up every couple of years for the best trip efficiency. It takes somewhere in the neighborhood of 3 months to get there and they don't want to increase the length of the trip by launching at non-optimum times.

Yes, they will probably plant an American flag there - no, it won't mean SpaceX is claiming ownership for America. It will just be a symbolic human achievement.

 

[MRG]

You people are funny!

I don't think SpaceX is scheduled to visit Mars until 2026 but there is a small chance it could be accelerated to 2024. I think the orbital mechanics of Earth and Mars only line up every couple of years for the best trip efficiency. It takes somewhere in the neighborhood of 3 months to get there and they don't want to increase the length of the trip by launching at non-optimum times.

Yes, they will probably plant an American flag there - no, it won't mean SpaceX is claiming ownership for America. It will just be a symbolic human achievement.

This is what I was semi joking about.

https://rtd.rt.com/stories/law-on-mars/

There is a law on Mars but there’s no one there able to ensure they’re obeyed. International treaties set the rules for space and how nations should act on Mars and beyond.*However, the treaties say nothing about private companies, like SpaceX, which is looking to start commercial flights and open space for civil exploration. While the space law bodies are keeping their eyes shut, Elon Musk’s tech-giant, SpaceX says it’s writing its constitution for Mars and doesn’t intend to comply with treaties signed by the US, when it comes to the Red Planet

 

[RetiredAtThirty-eight]

This is what I was semi joking about.

https://rtd.rt.com/stories/law-on-mars/

There is a law on Mars but there’s no one there able to ensure they’re obeyed. International treaties set the rules for space and how nations should act on Mars and beyond.*However, the treaties say nothing about private companies, like SpaceX, which is looking to start commercial flights and open space for civil exploration. While the space law bodies are keeping their eyes shut, Elon Musk’s tech-giant, SpaceX says it’s writing its constitution for Mars and doesn’t intend to comply with treaties signed by the US, when it comes to the Red Planet

Thanks! This just keeps getting more interesting! Humankind has never even visited another planet, let alone set up a settlement on one!

I would welcome an entire planet with a new constitution designed from scratch. Elon Musk is a pretty smart and humble guy. He recognizes the need for sensible regulation for the benefit of all and the system as a whole, but really frowns upon legalistic and bureaucratic red tape that tends to build up over time.

It should encourage as much freedom as is compatible with good governance.

 

[tulak]

I understand your valuation concerns and, if I thought they were valid, I would sell all my TSLA shares immediately.

You really need more than a superficial understanding of the company to understand why the company will likely be worth many times it's current nearly 700 billion dollar valuation by 2025. You can research this elsewhere but, in a nutshell, Tesla is developing into a lean, mean, growth machine with growing margins. Do not look towards the legacy auto companies to determine what Tesla profit margins will be because Tesla does things dramatically different and the margin growth is actually accelerating past the legacy manufacturers, even with much smaller manufacturing volume.

No one can make a competitive vehicle offering similar functionality and performance and sell it for the same price or less. That's why they can sell every car they make as soon as they make it. There is no reason to believe this is about to change. Tesla is a good 5 years ahead of the next closest competitor in terms of how much value they can offer.

Currently, the energy side of the business is of minor significance in terms of revenue and profits relative to the auto side of the business but that is starting to change quickly as the cost curve of solar and battery storage drop into the economical zone as evidenced by very high growth rates in recent quarters. Watch for Q4 2020 earnings and the full year report to be released sometime around January 20th and see how quickly the energy side of the business is growing.

The people bidding up Tesla shares into the stratosphere are not dreamers in a mania (those people don't have enough investable assets to bid it up to $700 billion in the first place). The big buyers are huge hundreds of millions and multi-billion dollar funds run by seasoned pros. Yes, it's possible for TSLA to have a dramatic correction but that's not going to stop it from zooming to new all-time highs and reaching a market cap of 2 trillion, 3 trillion and more after words.

Tesla makes a great car, but they aren't the only making EVs. Tesla's early advantage might or might not last. I'll pass on arguing that point and only point out that there is competition:

Electric car sales jump to record 54% market share in Norway in 2020 but Tesla loses top spot

https://www.marketwatch.com/story/e...-in-2020-but-tesla-loses-top-spot-11609857931

And yes, they are investing in the energy business. I suspect they'll be successful there too, but there will also be competition.

That's about right, just under $700 billion valuation. I expect it to get to 5 trillion before 2030 and to be the first company to reach a market cap of 3 trillion. That's assuming it's not split up into multiple companies before that happens.

So 5 trillion at 2030 is an annual return of 24%. That would be impressive.

Considering that the top three stock mutual funds (VFIAX, SPY, FXAIX) in their entirety total a paltry $1trn and the entire US GDP is only $20trn, that will be quite a thing to see. Maybe Tesla will apply for statehood; after all, the GDP of California is about $3trn and of Texas, less than $2trn. Or maybe it could join the UN? GDP of Great Britain is about $3trn. Aren't big numbers fun?

And that's the crux of it for me. Musk has done amazing things and I hope it continues, but I can't get past the idea that Tesla is hitting a ceiling. Law of large numbers and all that.