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Yes, Tesla is cool, but it's also likely several years away from profitability I think an investment advice without a timeframe is not good advice. So for some

Yes, Tesla is cool, but it's also likely several years away from profitability I think an investment advice without a timeframe is not good advice. So for someone who is expecting a capital gain in 10 years from now this is not the best advice. I'm all for buying into Tesla when it's at least closer to proving itself This contradicts two rules of stock markets: (1) Buy the rumor, sell the news and (2) Buy cheap, sell expensive.

jakarta 16y ago
Does it? How exactly do you determine Tesla is cheap (or expensive)? The business is set to lose $120M this year and according to the prospectus for the stock that I'm flipping through - they are basically betting their future on the $60K model working out. I'm not saying Tesla isn't a buy, but what I am saying is that the company is next to impossible to value. So when the author says it is good to wait till the company has proven itself a bit - I think he means when we can get an inkling of what kind of money they will earn which is probably after the $60K model comes out. Being able to value what you're buying is what gets you from speculating to investing.
- ccarpenterg 16y ago
  A long bet is not speculation. Nobody knows whether Tesla is going to fail or not. But since it's an IPO you can 'bet' that is the best price to buy in the long term. And for me speculation is buying BP's stock.
  - jakarta 16y ago
    Betting is speculating. "Speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum." And I agree - speculating is buying BP stock. David Barse of Third Avenue even said so the other day on Bloomberg. Third Avenue's ethos is to invest in companies that are "safe and cheap." Tesla is similar to BP in that you don't really have any indication of what the future will be like. In BP's case it is because nobody knows the future costs associated with the spill and how that will affect their earnings. With Tesla, the company has such a limited operating history with no history of profits that its future.
- damoncali 16y ago
  It may be hard to value, but you can back out the assumptions required to justify its current price and evaluate their probability of actually happening. The bar is very, very high for TSLA.

jakarta 16y ago

Does it? How exactly do you determine Tesla is cheap (or expensive)? The business is set to lose $120M this year and according to the prospectus for the stock that I'm flipping through - they are basically betting their future on the $60K model working out. I'm not saying Tesla isn't a buy, but what I am saying is that the company is next to impossible to value. So when the author says it is good to wait till the company has proven itself a bit - I think he means when we can get an inkling of what kind of money they will earn which is probably after the $60K model comes out. Being able to value what you're buying is what gets you from speculating to investing.

ccarpenterg 16y ago
A long bet is not speculation. Nobody knows whether Tesla is going to fail or not. But since it's an IPO you can 'bet' that is the best price to buy in the long term. And for me speculation is buying BP's stock.
- jakarta 16y ago
  Betting is speculating. "Speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum." And I agree - speculating is buying BP stock. David Barse of Third Avenue even said so the other day on Bloomberg. Third Avenue's ethos is to invest in companies that are "safe and cheap." Tesla is similar to BP in that you don't really have any indication of what the future will be like. In BP's case it is because nobody knows the future costs associated with the spill and how that will affect their earnings. With Tesla, the company has such a limited operating history with no history of profits that its future.
damoncali 16y ago
It may be hard to value, but you can back out the assumptions required to justify its current price and evaluate their probability of actually happening. The bar is very, very high for TSLA.