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So then it becomes about understanding risk. Let's say we are able to determine that there is 10 percent chance that this company will succeed or 90 percent tha

So then it becomes about understanding risk. Let's say we are able to determine that there is 10 percent chance that this company will succeed or 90 percent that it will fail completely, how would you then value the company right now? I guess my point here is to figure out how companies should be valued. I think to accurately value something you will need to estimate different most likely timelines and endings for a company and come back from there. I feel like anyone who does a blanket claim of TSLA or any other stock being overvalued has not done such calculations. Also I am not claiming Tesla is not overvalued, but just that you can't be this sure without doing those calculations. I am finding it so hard to find someone to have this discussion with.

bob33212 6y ago
Yes, you're right. It is about risk. There are hundreds of things that could go wrong on Tesla's path to converting the world to Autonomous EV transportation. No one knows which if any of those things will go wrong over the next 5-10 years. I'm not a day trader, so for me, saying that Tesla is overvalued today is like saying that people who buy flood insurance are stupid because there is no rain the 10 day forecast. If TSLA was $100k/share today then yes it would be overvalued. Just like if someone was paying $100k/month for flood insurance on a 200k house in the desert that would be stupid. For my analysis Tesla has a decent chance at building a 25k profitable EV and 5-6 other models at scale and succeeding in Autonomy within 5 years. So I'm comfortable buying today at anything below $1200.
- mewpmewp2 6y ago
  Funny you mention insurance. One way to think about buying tech stocks right now is to insure yourself against new "industrial revolution" type of thing, but more like "tech/ai revolution". I feel like I need to have at least something allocated in all of the tech companies that might be part of that revolution. Eventually unless governments are able to stop it, it seems like larger companies might grow even larger compared to others and it will be a very complex challenge to stop that monopolization. If Tesla success will be sure to happen it will be too late by then. It seems like FOMO and it is, but I think it is very reasonable. I don't invest in Tesla because I hope to double or triple short term, I just want to be part of what might very reasonably happen.

bob33212 6y ago

Yes, you're right. It is about risk. There are hundreds of things that could go wrong on Tesla's path to converting the world to Autonomous EV transportation. No one knows which if any of those things will go wrong over the next 5-10 years. I'm not a day trader, so for me, saying that Tesla is overvalued today is like saying that people who buy flood insurance are stupid because there is no rain the 10 day forecast. If TSLA was $100k/share today then yes it would be overvalued. Just like if someone was paying $100k/month for flood insurance on a 200k house in the desert that would be stupid. For my analysis Tesla has a decent chance at building a 25k profitable EV and 5-6 other models at scale and succeeding in Autonomy within 5 years. So I'm comfortable buying today at anything below $1200.

mewpmewp2 6y ago
Funny you mention insurance. One way to think about buying tech stocks right now is to insure yourself against new "industrial revolution" type of thing, but more like "tech/ai revolution". I feel like I need to have at least something allocated in all of the tech companies that might be part of that revolution. Eventually unless governments are able to stop it, it seems like larger companies might grow even larger compared to others and it will be a very complex challenge to stop that monopolization. If Tesla success will be sure to happen it will be too late by then. It seems like FOMO and it is, but I think it is very reasonable. I don't invest in Tesla because I hope to double or triple short term, I just want to be part of what might very reasonably happen.