LXEX55
Recycles dryer sheets
Is Tesla a good buy and hold for five years? Or is it overhyped? Opinions please and I thank you.
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.
+1 SpaceX is not Tesla. I think the satellite business is also not Tesla.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.
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.
The market price is where a willing seller meets a willing [-]greater fool[/-] buyer. What else could "worth" mean?... 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?
Is Tesla a good buy and hold for five years? Or is it overhyped? Opinions please and I thank you.
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."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
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.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...
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.)
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.So, you agree with me then..
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...
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.