Tesla for the long run?

[LXEX55]

Is Tesla a good buy and hold for five years? Or is it overhyped? Opinions please and I thank you.

 

[Toocold]

If you believe they will succeed with SpaceX, Neurolink, Solar Roofs, Battery Supplier, Boring, and Autonomous vehicles, they are extremely undervalued. If you believe they will only produce cars, they are extremely overvalued.

 

[Fermion]

If you buy Tesla at this level you better pray that Elon doesn't even catch a sniffle. Anything happens to Elon, Tesla drops from $2,000 to $200.

But it isn't like we are in a pandemic or anything.

 

[Chuckanut]

If you believe they will succeed with SpaceX, Neurolink, Solar Roofs, Battery Supplier, Boring, and Autonomous vehicles, they are extremely undervalued. If you believe they will only produce cars, they are extremely overvalued.

SpaceX is a separate company, IIRC. It is, IMHO, necessary to meet Mr. Musk's #1 priority - Make humanity a multi-planet species. He owns a majority of the stock and a big majority of the voting stock. SpaceX could continue to be a great success even if Tesla goes the way GM and Chrysler did in 2009 - bankruptcy.

I do not think they are linked, other than sharing some technological developments, and being an example of Mr. Musk's company beating out the older, established companies in the business. Can you say "Chicago based Boeing", ArianeSpace, Roscosmos, etc?

I regard Tesla as a speculation mostly because electric vehicles fill a very nice, growing niche, but it's still a niche.

 

[MRG]

SpaceX is a separate company, IIRC. It is, IMHO, necessary to meet Mr. Musk's #1 priority - Make humanity a multi-planet species. He owns a majority of the stock and a big majority of the voting stock. SpaceX could continue to be a great success even if Tesla goes the way GM and Chrysler did in 2009 - bankruptcy.

I do not think they are linked, other than sharing some technological developments, and being an example of Mr. Musk's company beating out the older, established companies in the business. Can you say "Chicago based Boeing", ArianeSpace, Roscosmos, etc?

I regard Tesla as a speculation mostly because electric vehicles fill a very nice, growing niche, but it's still a niche.

+1 SpaceX is not Tesla. I think the satellite business is also not Tesla.

I own a small amount of TSLA and a Model Y, great vehicle and technology. I'm pleased with the product and the support. I retired from technology and I'm not easy to impress.

I'll say Tesla is more than amazing automobiles and as much of an energy play as automobiles. I don't think EVs are fads, I think when Tesla semis replaced diesel technology folks will wake up. Battery day, September 22, promises to be interesting.

Do I think the stock is overvalued at $2100? Probably unless the S&P addition and battery day both move it more. It will go down next week.[emoji4]

 

[njhowie]

Do I think the stock is overvalued at $2100?

Yes, I think the stock is overvalued at $2100. That doesn't mean it can't or won't go higher.

 

[OldShooter]

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.

 

[braumeister]

Yes, I think the stock is overvalued at $2100. That doesn't mean it can't or won't go higher.

+1
The relevant quotation is
"The market can remain irrational longer than you can remain solvent"

Often attributed to John Maynard Keynes, although it's not clear who actually originated this line. Nevertheless, it's certainly true.

 

[Texas Proud]

Heck, I thought it was overvalued at $600...


There is no way that the company is worth the current price even with the recent small profits and any sensible growth rate..


It is not like they are making a product with a outsized margin like Apple and have a fan base as big as Apple and that fan base wants to trade in every 2 or 3 years..


As others have mentioned, it can stay at this elevated level for a LONG time.. and heck, might still go up as there are a lot of people who have FOMO...

 

[OldShooter]

... There is no way that the company is worth the current price ...

The market price is where a willing seller meets a willing [-]greater fool[/-] buyer. What else could "worth" mean?

 

[NW-Bound]

Tesla is a company with many claims to be first. However, CATL (Contemporary Amperex Technology), a Chinese company, was the first to coin and announce the "million-mile battery" in early June 2020, as far as I know. It was followed shortly with talk of Musk meeting with CATL CEO to discuss a deal, where CATL will supply battery for Tesla China production. CATL CEO said Musk kept mentioning cost as the main factor for Tesla.

Abracadabra! Suddenly, there's talk on the Web about "Tesla's million-mile battery". Interesting!

I am not long nor short Tesla, but I will watch this upcoming Tesla Battery Day to see if it is something beyond what CATL is selling. I am a lot more interested in battery technology than in EVs. CATL has been building a large factory in Germany to sell to German auto makers.

CATL is the #1 lithium cell maker in the world, followed by LG Chem. Panasonic who is making cells for Tesla inside the Gigafactory is #3.

 

[Blue531]

To LXEX55: I am long Tesla stock and am all in with my individual stock portfolio since the beginning of this year. As of today, I have almost 5x my investment. I cannot advocate for you to believe in this company. Only you can do that. There are many YouTubers currently available who have done a tremendous job of researching into the company and share tons of information. You can find out what Tesla is all about in various ways. Check out the many interviews with Cathie Wood, CIO of ARK invest and Ron Baron, the founder of Baron Capital. Tesla is a HUGE growth company.
Investing hard-earned money is such a personal thing. Perhaps, more information and insight into the company will help you to answer your own question.

 

[gerntz]

THe stock is not on my radar.

 

[Texas Proud]

The market price is where a willing seller meets a willing [-]greater fool[/-] buyer. What else could "worth" mean?

One way of determining worth is what a willing seller will pay to a willing buyer...


But we know that at times to be false... the tulip bulb mania is the perfect example... https://en.wikipedia.org/wiki/Tulip_mania


Another way to determine worth of a stock is its net present value of future cash flows... this is what I am using for my guess that it is not worth the price...


BTW, JCP and a few other companies have surged recently for some reason even though their value (future cash flow) is almost 100% zero as they are in BK and the common are stated to be worthless... just because someone is buying those shares I would not say they are worth the price..

 

[Toocold]

You are right. I guess they better win in the solar roof market too!

 

[KarlH]

Is Tesla a good buy and hold for five years? Or is it overhyped? Opinions please and I thank you.

I am not sure if it is a good buy or not. I am hoping for a little bump after the formal 5:1 split, and if my initial investment is doubled I will sell half and let the rest ride. I bought late, and have been thrilled by the last couple weeks, but could lose my shirt soon too.

 

[OldShooter]

One way of determining worth is what a willing seller will pay to a willing buyer...


But we know that at times to be false... the tulip bulb mania is the perfect example... https://en.wikipedia.org/wiki/Tulip_mania

I don't know that the existence of the tulip mania proves anything of the sort. From what I have read, there were many willing buyers and willing sellers establishing "worth."

Another way to determine worth of a stock is its net present value of future cash flows... this is what I am using for my guess that it is not worth the price...

That's the way I approach it too, but I don't say that such a number establishes some kind of canonical "worth." After all, no one even knows what the future cash flows will be. All I can say is that the stock's worth to me is far less than the present price. I don't know or care what the stock's worth might be to someone else.

Here is investing patriarch Ben Graham (in "The Intelligent Investor") on the problem: " ... 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?"

I think he would characterize the current price as "dear." (I have posted this quotation before; apologies to those who might be bored.)

 

[Animorph]

I sold half of my Tesla shares at $1905, which was more than 10x the $188 I bought 83% of the shares at. Aside from not fitting my portfolio, I was worried it would go down but optimistic that it will go up.

It's a fun ride, I like the products, but I'm not willing to bet a whole lot on either direction. So basically I'm no help with this problem. Other than make sure it's a small part of your portfolio.

 

[Texas Proud]

I don't know that the existence of the tulip mania proves anything of the sort. From what I have read, there were many willing buyers and willing sellers establishing "worth."

That's the way I approach it too, but I don't say that such a number establishes some kind of canonical "worth." After all, no one even knows what the future cash flows will be. All I can say is that the stock's worth to me is far less than the present price. I don't know or care what the stock's worth might be to someone else.

Here is investing patriarch Ben Graham (in "The Intelligent Investor") on the problem: " ... 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?"

I think he would characterize the current price as "dear." (I have posted this quotation before; apologies to those who might be bored.)

So, you agree with me then..

 

[OldShooter]

So, you agree with me then..

Well yes; that was my general point. But I make a subtle distinction in that I can know what a stock is "worth" to me. A recent consummated transaction will tell me what a stock is "worth" to that buyer, but I don't think there is some kind canonical "worth" on stone tablets somewhere that we can compare to these subjective determinations.

Absent the stone tablet I don't think anyone can say "There is no way that the company is worth the current price ... " Somebody always thinks it is or there would be no transaction.

It would be easier if we had the stone tablets of course.

 

[NW-Bound]

One way of determining worth is what a willing seller will pay to a willing buyer...

But we know that at times to be false... the tulip bulb mania is the perfect example... https://en.wikipedia.org/wiki/Tulip_mania

Another way to determine worth of a stock is its net present value of future cash flows... this is what I am using for my guess that it is not worth the price...

Well, there are things that have absolutely no cash flow, but are so unique that people are willing to pay a lot of money for it. The Mona Lisa is one example.

Yet, stock shares are not that rare, because they can be split and there will be more shares. And people actually like that. And a company can also issue new shares. It is like printing out more Mona Lisa posters, and each is as valuable as the original one. What not to love?


PS. I learned of the term "unicorn" stock. Tesla is now established enough to not be called a "unicorn", but there are around 360 unicorns according to a Web page I ran across. This is an interesting time.

 

[ownyourfuture]

I sold half of my Tesla shares at $1905, which was more than 10x the $188 I bought 83% of the shares at. Aside from not fitting my portfolio, I was worried it would go down but optimistic that it will go up.

It's a fun ride, I like the products, but I'm not willing to bet a whole lot on either direction. So basically I'm no help with this problem. Other than make sure it's a small part of your portfolio.

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.

 

[pj.mask]

I agree with the general consensus. The price is too high for where they are. We don’t know how far they will go (May or may not be worth more in the future). And near future value is hazy, ask again later.

I own a few shares and I’m up 3x. Currently maybe 1-2% of my portfolio so I’ll probably let it ride. I waited maybe a year to buy because the stock was too high. I still feel that way.

But I have a cybertruck in order and honestly do not expect to buy another gas vehicle for the rest of my life.

 

[Zathras]

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).

 

[Fermion]

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.