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The largest competitors now are Toyota, VW, Daimler, GM, Honda. Their combined market cap is about 400B. Do those companies have high debt loads? I agree compe

The largest competitors now are Toyota, VW, Daimler, GM, Honda. Their combined market cap is about 400B. Do those companies have high debt loads? I agree competitors will be in trouble in the coming EV transition and some are discounted, but I do also think Tesla is now vastly overvalued by the market. They've only just started making a profit, and they are still burning huge amounts of cash. I wouldn't be worried about solvency but I would worry that the future return promised by their valuation is extraordinary. Tesla has risen 800% in the last year, that seems to be unjustified by their progress in the same time frame.

intotheabyss 6y ago
The more likely scenario is that the next decades gains are just going to be priced in. Speculators think that Tesla will be a 1T company (in 2020 dollars) by the end of the 2020s, and I don't disagree, but a lot has to go right for that to be true. That means if it hits 1T within the next year, I suspect they'll have a decade of stagnation like the tech companies did after the dotcom bubble. But also, the fact that I have to stress that the valuation is in 2020 dollars should tell us all we need to know about this current market and the valuations we're seeing. Flood the markets with dollars, and you'll have outlandish valuations.
- grey-area 6y ago
  Yes markets tend to underprice and then overprice, then maybe drift down to a sensible valuation over time as companies grow. So perhaps we'll just see some stagnation in the stock price but there's no sign of it yet. This does feel like a speculative bubble and we've reached the FOMO stage where people think things are overvalued but invest anyway, because everyone else is. 25% of the S&P is in the largest 5 companies (all tech), market cap to GDP is at an all time high of 183.7% for the US. US assets in particular seems overvalued to me at present and heavily distorted by the massive QE programs that have been running since 2008 and gone into overdrive this year.
bryanlarsen 6y ago
Toyota: $18B VW: E200B Daimler: E160B GM: $100B Honda $65B Therefore their combined Enterprise value is about $1T.
- grey-area 6y ago
  Thanks. So on that basis their combined valuation is a bit higher and the valuation not quite so crazy, though still pretty crazy given the risks and capital reqd to become a toyota, let alone 3x a Toyota. Interesting that Toyota has so little debt compared to others.

intotheabyss 6y ago

The more likely scenario is that the next decades gains are just going to be priced in. Speculators think that Tesla will be a 1T company (in 2020 dollars) by the end of the 2020s, and I don't disagree, but a lot has to go right for that to be true. That means if it hits 1T within the next year, I suspect they'll have a decade of stagnation like the tech companies did after the dotcom bubble. But also, the fact that I have to stress that the valuation is in 2020 dollars should tell us all we need to know about this current market and the valuations we're seeing. Flood the markets with dollars, and you'll have outlandish valuations.

grey-area 6y ago
Yes markets tend to underprice and then overprice, then maybe drift down to a sensible valuation over time as companies grow. So perhaps we'll just see some stagnation in the stock price but there's no sign of it yet. This does feel like a speculative bubble and we've reached the FOMO stage where people think things are overvalued but invest anyway, because everyone else is. 25% of the S&P is in the largest 5 companies (all tech), market cap to GDP is at an all time high of 183.7% for the US. US assets in particular seems overvalued to me at present and heavily distorted by the massive QE programs that have been running since 2008 and gone into overdrive this year.

bryanlarsen 6y ago

Toyota: $18B VW: E200B Daimler: E160B GM: $100B Honda $65B Therefore their combined Enterprise value is about $1T.

grey-area 6y ago
Thanks. So on that basis their combined valuation is a bit higher and the valuation not quite so crazy, though still pretty crazy given the risks and capital reqd to become a toyota, let alone 3x a Toyota. Interesting that Toyota has so little debt compared to others.