4 ms·

But if "how Tesla will actually perform" in the future is already priced in today, the stock can't continue to go up unless it continues to be overpriced.

tachyonbeam 9y ago
What is it with this "already priced in" bullshit? It should be obvious by now that stock prices are not based on pure, rational calculations of value. This is why one single news article, like this one, can drop the value of the stock by 7%. The only way to know how Tesla will perform is to watch things unfold. A few years back, when Tesla was struggling to make the Model S happen, would you say that its current success was "already priced in"? I would say that most of the big investors who are betting against Tesla are finance people, with a relatively poor understanding of the real potential for this company. They tend to see it purely as a car company. They don't understand that Tesla's battery production, their solar and utility-scale energy storage businesses are also worth quite a bit. They don't understand that the self-driving technology has a lot of value as well. They also don't understand that Tesla's electric cars are currently outperforming every other electric car, and every production ICE car as well. And lastly, they don't understand that Tesla is basically the Apple of cars, they sell cool, hot ticket items. Finance people who think "Tesla just can't unseat GM and Ford" are have definitely not "priced in" all the information. The people who are betting for Tesla are either people more familiar with technology, or people who are just really rooting for change, and happy to see a newcomer finally shake things up. The latter have not "priced in" much information either, they are going based on hope. I personally think that Tesla has a very good shot at succeeding. Not only because Elon Musk does seem to eventually deliver what he promises, but also because the company has so many people rooting for it. These days, when Tesla needs financing, they just issue more shares, and people buy them up. This basically means that Tesla can pull itself out of debt very easily. I don't think that Ford and GM can say the same, they do not have millions of small investors rooting for them, ready to pull them out of debt. If Tesla slips up in its Model 3 deliveries, even by quite a bit, I do think the stock price will suffer, temporarily, but I think that most people will forgive them. Many people, myself included, are just very happy to see electric cars finally becoming a reality. I know that if Tesla ever drops near $200 again, I will be buying a whole lot more of it.
- amorphid 9y ago
  As a pro Tesla techie+investor, I'm willing to pay up to $N per share for Tesla. The more below $N it is, the more I feel I'm getting a better deal. That doesn't have much to do with how much I believe, or don't believe in Tesla as a company. I'm willing to pay up to a certain amount for a Model 3, just like I'm willing to pay up to a certain amount for a share of Tesla. No matter how much I like a Model 3, I'm not going to buy the last car on the lot for 2x the price because it's the last one. I'll just wait until there's another one at the regular price.
  - tachyonbeam 9y ago
    How do you calculate what you believe is a fair price for Tesla shares? What would your current fair price be?
    - amorphid 9y ago
      >> How do you calculate what you believe is a fair price for Tesla shares? That is the question for which everyone wants to an answer that only they know :) You can build really sophisticated models to predict stock prices, but all models are really just making guesses about what a fair stock price is. Some common questions to ask are: - Does it have a positive the ACID test ratio? [1] Looking at the balance sheet [2], do the current assets exceed the current liabilities? If everyone thinks Tesla can pay it's bills, but you think they will have trouble doing so, you may believe a fair price is lower than what everyone else thinks. - Does the company have a sensible price-to-earnings ratio? [3] Looking at the stock info [4], how much weight should you put on the P/E when determining what a fair price is? - How fast is the company growing? Looking at the income statement [5], do you believe Tesla will grow faster or slower than it has been? And is your estimate higher or lower than what other people are guessing? - How much will Tesla have to pay for Lithium in the future? [6] Do you predict that Lithium will cost more or less than the other people are guessing, and how much should your estimate factor into determining a fair value for Tesla stock. [1] http://www.investopedia.com/terms/a/acidtest.asp http://www.investopedia.com/terms/a/acidtest.asp [2] https://finance.yahoo.com/quote/TSLA/balance-sheet?p=TSLA https://finance.yahoo.com/quote/TSLA/balance-sheet?p=TSLA [3] http://www.investopedia.com/terms/p/price-earningsratio.asp http://www.investopedia.com/terms/p/price-earningsratio.asp [4] https://finance.yahoo.com/quote/TSLA/?p=TSLA https://finance.yahoo.com/quote/TSLA/?p=TSLA [5] https://finance.yahoo.com/quote/TSLA/financials?p=TSLA https://finance.yahoo.com/quote/TSLA/financials?p=TSLA [6] https://www.metalary.com/lithium-price/ https://www.metalary.com/lithium-price/

tachyonbeam 9y ago

What is it with this "already priced in" bullshit? It should be obvious by now that stock prices are not based on pure, rational calculations of value. This is why one single news article, like this one, can drop the value of the stock by 7%. The only way to know how Tesla will perform is to watch things unfold. A few years back, when Tesla was struggling to make the Model S happen, would you say that its current success was "already priced in"? I would say that most of the big investors who are betting against Tesla are finance people, with a relatively poor understanding of the real potential for this company. They tend to see it purely as a car company. They don't understand that Tesla's battery production, their solar and utility-scale energy storage businesses are also worth quite a bit. They don't understand that the self-driving technology has a lot of value as well. They also don't understand that Tesla's electric cars are currently outperforming every other electric car, and every production ICE car as well. And lastly, they don't understand that Tesla is basically the Apple of cars, they sell cool, hot ticket items. Finance people who think "Tesla just can't unseat GM and Ford" are have definitely not "priced in" all the information. The people who are betting for Tesla are either people more familiar with technology, or people who are just really rooting for change, and happy to see a newcomer finally shake things up. The latter have not "priced in" much information either, they are going based on hope. I personally think that Tesla has a very good shot at succeeding. Not only because Elon Musk does seem to eventually deliver what he promises, but also because the company has so many people rooting for it. These days, when Tesla needs financing, they just issue more shares, and people buy them up. This basically means that Tesla can pull itself out of debt very easily. I don't think that Ford and GM can say the same, they do not have millions of small investors rooting for them, ready to pull them out of debt. If Tesla slips up in its Model 3 deliveries, even by quite a bit, I do think the stock price will suffer, temporarily, but I think that most people will forgive them. Many people, myself included, are just very happy to see electric cars finally becoming a reality. I know that if Tesla ever drops near $200 again, I will be buying a whole lot more of it.

amorphid 9y ago
As a pro Tesla techie+investor, I'm willing to pay up to $N per share for Tesla. The more below $N it is, the more I feel I'm getting a better deal. That doesn't have much to do with how much I believe, or don't believe in Tesla as a company. I'm willing to pay up to a certain amount for a Model 3, just like I'm willing to pay up to a certain amount for a share of Tesla. No matter how much I like a Model 3, I'm not going to buy the last car on the lot for 2x the price because it's the last one. I'll just wait until there's another one at the regular price.
- tachyonbeam 9y ago
  How do you calculate what you believe is a fair price for Tesla shares? What would your current fair price be?
  - amorphid 9y ago
    >> How do you calculate what you believe is a fair price for Tesla shares? That is the question for which everyone wants to an answer that only they know :) You can build really sophisticated models to predict stock prices, but all models are really just making guesses about what a fair stock price is. Some common questions to ask are: - Does it have a positive the ACID test ratio? [1] Looking at the balance sheet [2], do the current assets exceed the current liabilities? If everyone thinks Tesla can pay it's bills, but you think they will have trouble doing so, you may believe a fair price is lower than what everyone else thinks. - Does the company have a sensible price-to-earnings ratio? [3] Looking at the stock info [4], how much weight should you put on the P/E when determining what a fair price is? - How fast is the company growing? Looking at the income statement [5], do you believe Tesla will grow faster or slower than it has been? And is your estimate higher or lower than what other people are guessing? - How much will Tesla have to pay for Lithium in the future? [6] Do you predict that Lithium will cost more or less than the other people are guessing, and how much should your estimate factor into determining a fair value for Tesla stock. [1] http://www.investopedia.com/terms/a/acidtest.asp http://www.investopedia.com/terms/a/acidtest.asp [2] https://finance.yahoo.com/quote/TSLA/balance-sheet?p=TSLA https://finance.yahoo.com/quote/TSLA/balance-sheet?p=TSLA [3] http://www.investopedia.com/terms/p/price-earningsratio.asp http://www.investopedia.com/terms/p/price-earningsratio.asp [4] https://finance.yahoo.com/quote/TSLA/?p=TSLA https://finance.yahoo.com/quote/TSLA/?p=TSLA [5] https://finance.yahoo.com/quote/TSLA/financials?p=TSLA https://finance.yahoo.com/quote/TSLA/financials?p=TSLA [6] https://www.metalary.com/lithium-price/ https://www.metalary.com/lithium-price/