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>The people long on TSLA are not expecting a payout by 2018 This doesn't represent a single year payout, it represents a hypothetical annual payout of dividend

>The people long on TSLA are not expecting a payout by 2018 This doesn't represent a single year payout, it represents a hypothetical annual payout of dividends. If the payout comes later than 2018, then you should pay less for it today. So what year? How much will the earnings be? How will those earnings be achieved (how many cars sold)?

maxander 10y ago
Tesla is a long-term bet, but a virtue of the stock market is that the market's horizon for payouts is potentially much longer than any individual's. If I'm holding a bunch of TSLA stock and want a payout in 2018, it doesn't matter to me what Tesla's profits are in 2018, it only matters how optimistic the market is about Tesla's long-term future- since that dictates how much I can sell my shares for in 2018. If Elon Musk shuts down sales altogether in 2018 but somehow convinces everyone that 2019 (or later) will be a complete blockbuster year, it still works out in my favor, since the market has superhuman patience I lack.
- bigtimeidiot 10y ago
  >If I'm holding a bunch of TSLA stock and want a payout in 2018, it doesn't matter to me what Tesla's profits are in 2018 This has nothing to do with a 2018 payout. Do you know what you are buying when you buy a share of TSLA? You are buying a claim to future profits. You expect to be paid in the future: when and how much? If you can't answer those questions, why are you buying stocks ?
  - taysic 10y ago
    I'm not expert but the value of a stock is not only tied to profit, it's also tied to how optimistic people are about a company and where it will go in the future. That drives up the price of a stock and thus how much you can sell it for. This is what Elon Musk is a master at - whether his strategy is feasible or not. I personally believe Musk will not give up.
    - bigtimeidiot 10y ago
      >I'm not expert but the value of a stock is not only tied to profit, it's also tied to how optimistic people are about a company and where it will go in the future. Those people are optimistic because they expect their share of profits to rise in the future.
  - qaq 10y ago
    If you came up with a definitive way to value stocks it would mean a) you are probably the richest man in the world b) You at the very least deserve a Nobel prize in economics.
    - bigtimeidiot 10y ago
      >If you came up with a definitive way to value stocks it would mean a) you are probably the richest man in the world b) You at the very least deserve a Nobel prize in economics. I'm not looking for a "definitive way", I'm looking for a rational way to assist in pricing a stock. When something can't be forecast perfectly, we should cease forecasting it at all? I'm just asking a simple question about what you'd pay for the stock, and why.
  - maxander 10y ago
    Sure, but the value of a stock isn't tied to what I will be paid from it through dividends or whatever- its the value of what I and all future holders of the stock can expect to be paid. How long I hold the stock, and how much of those dividends I personally receive, is not an important factor.

maxander 10y ago

Tesla is a long-term bet, but a virtue of the stock market is that the market's horizon for payouts is potentially much longer than any individual's. If I'm holding a bunch of TSLA stock and want a payout in 2018, it doesn't matter to me what Tesla's profits are in 2018, it only matters how optimistic the market is about Tesla's long-term future- since that dictates how much I can sell my shares for in 2018. If Elon Musk shuts down sales altogether in 2018 but somehow convinces everyone that 2019 (or later) will be a complete blockbuster year, it still works out in my favor, since the market has superhuman patience I lack.

bigtimeidiot 10y ago
>If I'm holding a bunch of TSLA stock and want a payout in 2018, it doesn't matter to me what Tesla's profits are in 2018 This has nothing to do with a 2018 payout. Do you know what you are buying when you buy a share of TSLA? You are buying a claim to future profits. You expect to be paid in the future: when and how much? If you can't answer those questions, why are you buying stocks ?
- taysic 10y ago
  I'm not expert but the value of a stock is not only tied to profit, it's also tied to how optimistic people are about a company and where it will go in the future. That drives up the price of a stock and thus how much you can sell it for. This is what Elon Musk is a master at - whether his strategy is feasible or not. I personally believe Musk will not give up.
  - bigtimeidiot 10y ago
    >I'm not expert but the value of a stock is not only tied to profit, it's also tied to how optimistic people are about a company and where it will go in the future. Those people are optimistic because they expect their share of profits to rise in the future.
- qaq 10y ago
  If you came up with a definitive way to value stocks it would mean a) you are probably the richest man in the world b) You at the very least deserve a Nobel prize in economics.
  - bigtimeidiot 10y ago
    >If you came up with a definitive way to value stocks it would mean a) you are probably the richest man in the world b) You at the very least deserve a Nobel prize in economics. I'm not looking for a "definitive way", I'm looking for a rational way to assist in pricing a stock. When something can't be forecast perfectly, we should cease forecasting it at all? I'm just asking a simple question about what you'd pay for the stock, and why.
- maxander 10y ago
  Sure, but the value of a stock isn't tied to what I will be paid from it through dividends or whatever- its the value of what I and all future holders of the stock can expect to be paid. How long I hold the stock, and how much of those dividends I personally receive, is not an important factor.