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I guess Goldman knows better how to value a young car company that moves 5 times faster than the rest of the industry, makes mind blowing products that people w
by mvpu 9y ago
I guess Goldman knows better how to value a young car company that moves 5 times faster than the rest of the industry, makes mind blowing products that people want to buy without even seeing them, has an unprecedented cult following with many betting their entire 401k on the company, and has survived many near death moments and came out strong... I wonder what gives such armchair analysts conviction to comment on companies like Tesla, Amazon and Netflix who are driven by irrationality and ambition.
- matwood 9y agoI agree with everything you say, but the run up on TSLA has been pretty amazing. As a TSLA fan, even I finally capitulated and took some profit.
- grandalf 9y agoExcellent point. What's interesting about it is that a stock price contains all sorts of assumptions and information and blends it all together into one number, which is simply the last price that a share traded at based on supply and demand. Surely Goldman has baked a lot of assumptions about market expectations into this assessment, and surely Goldman is wrong about many of those assumptions and right about others. A more nuanced analysis would be a probability distribution of possible price bands at various future dates. Surely by Goldman's logic it is irrational to buy (or perhaps even to hold) Tesla stock at above $185. But Goldman's analysis would also likely have discouraged investment in many other successful firms over the years. One doesn't listen to Goldman because the advice is true, one listens to it simply to reduce the probability of major deviations from the mean across a portfolio.
- mdns33 9y agofair point.