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If you don't have at least some uncertainty and doubt about how Musk does things you aren't paying enough attention. Innovation necessarily means uncertainty.

by csours 9y ago

If you don't have at least some uncertainty and doubt about how Musk does things you aren't paying enough attention. Innovation necessarily means uncertainty. I know the Model X already launched, but it launched late, and at a slower production rate than expected. Musk himself acknowledged that if he had to do it over again he probably wouldn't. My point is that innovation is expensive in time, money, and attention. Musk has learned to overcome some obstacles that traditional competitors had already overcome; but that comes with some Not Invented Here mindset. P/E is a single number, that's true, but find me a traditional manufacturer anywhere, anytime that has been rewarded by the stock market for embracing innovation so much that they have a negative P/E. Investors treat Tesla like a tech company in their valuation, not like an automaker. We'll see if that valuation method is more accurate. Anyway, I'm continually amazed by what Musk has accomplished, but it's important to acknowledge the risks.

Sohcahtoa82 9y ago
> Investors treat Tesla like a tech company in their valuation, not like an automaker. Uh, because they are a tech company. They also produce batteries and solar panels, not to mention making huge strides in self-driving capabilities. Again, with the negative P/E, keep in mind that once the 400,000 Model 3 reservations start going out the door in a couple months and people need to start throwing the remaining $34,000 at them, that's going to increase their earnings by at least $13.6 billion. That's billion with a B. What will that do to their P/E? And that's assuming everyone gets the base model, which certainly won't be the case. Elon has stated he expects the average car to sell for about $43,000 with options, which would put those earnings to $16.8 billion. Certainly, there is risk, but their high valuation suggests that investors are confident in Telsa's ability to produce. I'd certainly be buying TSLA if I had enough income to make a worthwhile investment.

by csours 9y ago

Sohcahtoa82 9y ago

> Investors treat Tesla like a tech company in their valuation, not like an automaker. Uh, because they are a tech company. They also produce batteries and solar panels, not to mention making huge strides in self-driving capabilities. Again, with the negative P/E, keep in mind that once the 400,000 Model 3 reservations start going out the door in a couple months and people need to start throwing the remaining $34,000 at them, that's going to increase their earnings by at least $13.6 billion. That's billion with a B. What will that do to their P/E? And that's assuming everyone gets the base model, which certainly won't be the case. Elon has stated he expects the average car to sell for about $43,000 with options, which would put those earnings to $16.8 billion. Certainly, there is risk, but their high valuation suggests that investors are confident in Telsa's ability to produce. I'd certainly be buying TSLA if I had enough income to make a worthwhile investment.