4 ms·

The early versions of the Model X were trash too. Tesla has some serious quality control problems. But the market doesn't really care apparently. They are no

The early versions of the Model X were trash too. Tesla has some serious quality control problems. But the market doesn't really care apparently. They are now the largest car company in the world by market cap ... while making one twentieth the number of cars that Toyota does ... at vastly poorer quality.

wumpus 5y ago
It's as if your assumption that Tesla QC hasn't changed is wrong.
adventured 5y ago
> But the market doesn't really care apparently. Shorter term the market is frequently irrational and inefficient, highly susceptible to wild swings in investor emotion and speculation (see: meme stocks, aka high-flying pump & dump stocks, which existed 30-40 years ago too). You get rich in the market by taking advantage of how predictable and unchanging human behavior is. The market is made up of emotional humans, most of which struggle to be rational about very simple investment decisions. They frequently panic sell and panic buy. They fear standing alone above all else, so they sell when everybody else sells, and they chase-buy when everybody else is chasing (FOMO prompts remarkably foolish behavior when it comes to investing and speculating). Even the supposed pros on Wall Street are overwhelmingly mediocre when it comes to making rational investment decisions, and very prone to chasing fads (and getting buried by them), which is why their track records are so often subpar. They're consensus machines terrified of their own shadows (nobody ever got fired for buying IBM, same mental concept but applied to portfolio management), so they inevitably consensus slink down below the S&P500 average. There isn't a single prominent US stock of the past ~50 years that has floated perpetually at an extreme valuation without delivering the goods. Often hitting expectations just gets you years of compression regardless, after having pulled results forward from so far into the future (Microsoft more than tripled in size and the stock went sideways for 15 years; compression). Tesla has to continue to deliver, or else. Short-term people lose sight of this fact of market history, that no stock actually escapes reality. They get caught up in thinking whatever the context is today that it'll continue to be the context. That was true in the speculations of the 1970s, 1980s, 1990s, 2000s, 2010s, and it's just as true today. Short-term often feels longer than it really is. A few years is short-term, not long-term. Name any of the prominent hyper valuation tech stocks from the 1990s or 2000s that didn't either deliver on the growth promise (AMZN, GOOGL, NFLX, etc), implode (long list of dotcoms as one group example, or eg solar stocks from the commodity bubble of 2006-2008), or compress/stagnate sideways for many years (MSFT, INTC, CSCO, ORCL, etc). No stock escapes reality, they all ultimately have to deliver or else. Tesla won't be different. Tesla is floating on immense expectations that they'll eventually become larger than companies like Toyota. And they're also floating on their significant growth in recent years (that's obviously the fuel for investors that keeps them believing the longer term story). Either they continue to deliver on growth expectations, or the consequences to the stock are obvious - the market cares very much about whether they continue to deliver.

wumpus 5y ago

It's as if your assumption that Tesla QC hasn't changed is wrong.

adventured 5y ago

> But the market doesn't really care apparently. Shorter term the market is frequently irrational and inefficient, highly susceptible to wild swings in investor emotion and speculation (see: meme stocks, aka high-flying pump & dump stocks, which existed 30-40 years ago too). You get rich in the market by taking advantage of how predictable and unchanging human behavior is. The market is made up of emotional humans, most of which struggle to be rational about very simple investment decisions. They frequently panic sell and panic buy. They fear standing alone above all else, so they sell when everybody else sells, and they chase-buy when everybody else is chasing (FOMO prompts remarkably foolish behavior when it comes to investing and speculating). Even the supposed pros on Wall Street are overwhelmingly mediocre when it comes to making rational investment decisions, and very prone to chasing fads (and getting buried by them), which is why their track records are so often subpar. They're consensus machines terrified of their own shadows (nobody ever got fired for buying IBM, same mental concept but applied to portfolio management), so they inevitably consensus slink down below the S&P500 average. There isn't a single prominent US stock of the past ~50 years that has floated perpetually at an extreme valuation without delivering the goods. Often hitting expectations just gets you years of compression regardless, after having pulled results forward from so far into the future (Microsoft more than tripled in size and the stock went sideways for 15 years; compression). Tesla has to continue to deliver, or else. Short-term people lose sight of this fact of market history, that no stock actually escapes reality. They get caught up in thinking whatever the context is today that it'll continue to be the context. That was true in the speculations of the 1970s, 1980s, 1990s, 2000s, 2010s, and it's just as true today. Short-term often feels longer than it really is. A few years is short-term, not long-term. Name any of the prominent hyper valuation tech stocks from the 1990s or 2000s that didn't either deliver on the growth promise (AMZN, GOOGL, NFLX, etc), implode (long list of dotcoms as one group example, or eg solar stocks from the commodity bubble of 2006-2008), or compress/stagnate sideways for many years (MSFT, INTC, CSCO, ORCL, etc). No stock escapes reality, they all ultimately have to deliver or else. Tesla won't be different. Tesla is floating on immense expectations that they'll eventually become larger than companies like Toyota. And they're also floating on their significant growth in recent years (that's obviously the fuel for investors that keeps them believing the longer term story). Either they continue to deliver on growth expectations, or the consequences to the stock are obvious - the market cares very much about whether they continue to deliver.