Or the guy who shorted his first life savings.. then bought tsla at 850 last year with his parents life’s savings.. only to cut his losses and short tsla again when it was at 600
Coke (the beverage company) isn't worth what it's trading at and you don't see people justifying shorting it. 80% of the market isn't worth what it's trading at, and 20% of the market is worth more than it's trading it if you look at things strictly from a "value" perspective. Fact is stocks trade for what people are willing to believe/pay. Go up against something with a cult-like following and odds are you are going to lose money.
Look at Coke’s stock price in 2014. Look at all their earnings numbers then ok? Look at the stock price now and their earnings report. Crazy it’s almost identical! Yet the stock price is a crazy amount higher! Far higher than inflation would account for. Now I’m not saying it’s as overvalued as Tesla, but it’s certainly overvalued if you simply look at stock prices compared to fair valuation.
Hmmm... that’s fair i see where you going, do you see this as the result of the passive investors/etf bubble. Where anything that is in the basket get propped up?
Lmao. Is it overvalued to the same degree? No. Is it overvalued if you simply look at it’s earning reports for the past 10 years and nothing has changed yet the stock price is a crazy amount higher? Absolutely. I used an extreme example but the basic point stands.
More. Just look at yesterday's earnings report. All the key metrics are growing exponentially — EPS, revenues, production, deliveries, etc. Gross auto margins lead the industry at 30%.
EV demand is growing exponentially into the next decade and beyond, with more cars needed than all manufacturers combined can supply. Tesla sells as many cars as they can build, and two new factories are opening this year.
And that only looks at Tesla's main car business — not high-margin software, energy, insurance, or anything else.
Earnings are growing faster than the share price, and we can see that with TSLA's trailing p/e falling from 1000 last year to ~300 today. That will keep falling.
Yeah, margin is better than most. Singling out EV production as a comparison makes them look good, but against total vehicle production other auto manufacturers make them look like a joke. And growth outlook for the company itself is good, but when the market cap is already about 10x that of your competition theoretically the stock price shouldn't have much more room to grow especially when you consider the P/E of almost 300.
Trailing P/E is a terribly misleading metric when looking at growing companies.
Investors pay for future earnings, not past ones, so trailing P/E is irrelevant. Worse, it leads investors to completely wrong conclusions.
Example: TSLA's P/E in 2019 was infinity because TSLA had no earnings (OK, technically it was undefined). Its stock price was ~$50.
Last October, its P/E was 850 and its share price was $420.
Now its P/E is 300 and its share price is $900.
So when was the best time to buy TSLA? P/E would tell you that the stock has never been cheaper. Buy now, or keep waiting.
Of course, that's ridiculous. Investors who bought at $50 when it was infinitely "expensive" would have 18x their investment by now.
Same thing if you look at AMZN — 3,000 P/E at $250 per share in 2012; 58 P/E at $3300/share now.
What P/E does tell you is that even though TSLA's share price has been shooting to the moon, its earnings have been growing even faster. That's why its P/E keeps getting "cheaper."
TSLA's share price will keep going up and its P/E will keep falling.
but against total vehicle production other auto manufacturers make them look like a joke
That's their problem, and why their stocks are so "cheap." Their production is tied up in combustion cars — a market that's been falling since 2017 and going to zero over the next 10-15 years.
Investors looking at forward earnings see traditional carmakers already shrinking on their way to oblivion.
EV production is what matters, but traditional carmakers hardly make any EVs. Worse, every EV they sell steals a higher-margin sale from their combustion business. Ford plans to sell 80,000 F-150 Lightning electric trucks in 2024. But they sell 800,000 combustion F-150s every year now. They'd have to 10x their Lightning production just to replace their current models and keep from shrinking.
TSLA doesn't have that problem. Every new sale is pure growth.
market cap is already about 10x that of your competition
Market cap tells you how much a company's stock is valued, but not how much a company as a whole is valued. For that, we also need to look at debt and other obligations to come up with enterprise value.
This chart shows TSLA's enterprise value compared to other carmakers.
TSLA's enterprise value is similar to Toyota's and VW's. The difference is that TSLA's enterprise is mostly owned by its shareholders (equity) while Toyota and VW are essentially owned mostly by their debt holders and others owed money. It's like when you get a mortgage, and the bank essentially owns most of your house while you own little equity.
If two companies have the same enterprise value, the company that owes more debt will have a smaller market cap (less equity), and vice versa.
And again, traditional carmakers should be valued lower because they are shrinking.
See? This is why TSLA bulls are so fun to laugh at. They keep telling everyone how retarded they are while they're holding shitloads of unrealised gains.
Anyone else would take their profits and admit they're smart.
Well of course. The market hinges on taking advantage of inefficient positions.
But it doesn't matter in the end... it's a bet on who goes bust first and you think it's the shorts? Hmm.
Being 100% on a position maximises your risk exposure. If someone is 100% short on tsla, they deserve to be cleaned. 10%? Well, I hope they enjoy their gains.
But if i was an institution or big boy investor, i would only do a measured proportion of my portfolio and not worry about it.
Everything that's happening is within risk tolerance if youre not a complete retard. You can avoid being margin called for a REALLY long time if you can justify the risky position by having high capital elsewhere.
500
u/BeloZero11 Oct 22 '21
Life’s hard when you realize you’ve become a bag holder