4 ms·

I don't really like the analogy for several reasons, but what's wrong with IBM? Have you looked at their share price over the past 12 months? As of today, IBM i

by dkrich 10y ago

I don't really like the analogy for several reasons, but what's wrong with IBM? Have you looked at their share price over the past 12 months? As of today, IBM is trading at around $164 billion market cap and paying out a dividend of over 3%. I'd say that's pretty good. I don't short stocks because I don't believe in trying to time the market. I actually think Tesla could move well north of where it is currently trading. Not because I think they are going to grow to justify the valuation, but because I think lots of people will look at the $45 billion valuation and will incorrectly compare it to Amazon, Facebook (as you just did), Alphabet, and Apple and think $45 billion is low. However I am long Ford. In fact it comprises the largest percentage of my personal portfolio. I continue to add more to it with every drop and just added more a few days ago. While the value has been dropping over the past couple of years, I've been collecting healthy dividends along the way ($F pays out now over a 5% yield), and am happy to sit and wait to see how long people will wait for Tesla to move beyond a niche auto maker and into the mainstream market. Edit: One other point- this recent run-up is attributable to Tesla delivering more cars this quarter than expected, not because they just unveiled some new technology the market wasn't previously aware of. TSLA has been extremely volatile whether you've been long or short over the past 2-3 years. All it takes is one missed earnings report and it'll send this stock down at least 25%.

apexalpha 10y ago
In general people who invest in stock are people who work at big financial institutions. Not 'regular' people trading on their own. For individuals, picking stock in stead of just buying accross the board is really risky. So it doesn't matter what 'lots of people' think, really. The only thing happening now is that investors seem to be extremely worried of 'missing the boat' on automated driving. See the big investment in Uber, a taxi company with an app that essentially anyone can copy. But they raised billions on the promise of automated driving. The only thing here is the idea that the organisation that perfects automated driving first will dominate every transport sector. That seems far fetched to me though. But hey, I'm just a regular person too. So maybe I'm dead wrong.
seanmcdirmid 10y ago
Tesla is RISKY: it is a bigger gamble, higher volatility, higher upside if it works out, bigger chance of it going completely bust. Put Tesla in your portfolio if you want to add some risk to it. You want stability with a healthy dividend? Well, add some Ford to it. Shorting is the way you capitalize on a stock that you think is overvalued. It is an advanced maneuver but can be done for the long term as well. IBM...man, IBM is a tech company that got rid of most of its R&D to focus on consulting and accounting tricks. But ignoring that, IBM has a huge R&D division but has been unable to come up with any breakthroughs for quite some time now, it is the canonical mature tech company that isn't going to have rapid growth like a startup.
- clock_tower 10y ago
  If you're looking for other stable tech-sector companies (mostly supplying corporate infrastructure), FICO and PEGA are good examples; so is Microsoft, for that matter. But why look for them? (They're S&P 500 components with solid dividends, so maybe that's answer enough.)
  - seanmcdirmid 10y ago
    I own Microsoft stock, it isn't exactly a growth one.

by dkrich 10y ago

apexalpha 10y ago

In general people who invest in stock are people who work at big financial institutions. Not 'regular' people trading on their own. For individuals, picking stock in stead of just buying accross the board is really risky. So it doesn't matter what 'lots of people' think, really. The only thing happening now is that investors seem to be extremely worried of 'missing the boat' on automated driving. See the big investment in Uber, a taxi company with an app that essentially anyone can copy. But they raised billions on the promise of automated driving. The only thing here is the idea that the organisation that perfects automated driving first will dominate every transport sector. That seems far fetched to me though. But hey, I'm just a regular person too. So maybe I'm dead wrong.

seanmcdirmid 10y ago

Tesla is RISKY: it is a bigger gamble, higher volatility, higher upside if it works out, bigger chance of it going completely bust. Put Tesla in your portfolio if you want to add some risk to it. You want stability with a healthy dividend? Well, add some Ford to it. Shorting is the way you capitalize on a stock that you think is overvalued. It is an advanced maneuver but can be done for the long term as well. IBM...man, IBM is a tech company that got rid of most of its R&D to focus on consulting and accounting tricks. But ignoring that, IBM has a huge R&D division but has been unable to come up with any breakthroughs for quite some time now, it is the canonical mature tech company that isn't going to have rapid growth like a startup.

clock_tower 10y ago
If you're looking for other stable tech-sector companies (mostly supplying corporate infrastructure), FICO and PEGA are good examples; so is Microsoft, for that matter. But why look for them? (They're S&P 500 components with solid dividends, so maybe that's answer enough.)
- seanmcdirmid 10y ago
  I own Microsoft stock, it isn't exactly a growth one.