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> If insolvency were a concern the stock would be much lower. TSLA is down 28% this month. How much lower would it have to go before you were convinced that th
by Analemma_ 9y ago
> If insolvency were a concern the stock would be much lower.
TSLA is down 28% this month. How much lower would it have to go before you were convinced that the market is "actually" worried about insolvency?
And frankly, even if it weren't down, your position would still make no sense. People trade bonds on the expectation of whether or not they'll be paid back. Are you trying to claim stock prices represent what the market really thinks, but bond prices are just posturing?
- paulpauper 9y agoYeah but Tesla is very volatile though. A 30% one-day decline on capital crisis would be a cause for concern, but that has not happened. Rather, Tesla is mirroring the market but with a higher beta.
- perl4ever 9y agoThe way I look at things is, every numerical quantity in science has an uncertainty +/- applied to it, right? Well, the market price of something has a significant amount of uncertainty because it's based on future expectations. But we don't know what that uncertainty is. So if something declines 15% or 30% or whatever, it could be fluctuating entirely within the band of uncertainty and not reflecting any meaningful change in expectations, but not reflecting any error by the market either. Or it could mean something or be an error. Fundamentally we don't and can't know by looking at the price chart.