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By traditional, I mean the methods people have used to appraise companies for hundreds of years. i.e., I'm predicting that given enough time, Tesla will revert
by missedthecue 5y ago
By traditional, I mean the methods people have used to appraise companies for hundreds of years. i.e., I'm predicting that given enough time, Tesla will revert to the mean, because literally every other publicly traded company that's ever existed has done this. Sure, maybe Tesla will be the first company since the 1600s to avoid this. After all, the only modeling data anyone doing anything has is historical data.
But that's a hell of a gamble to make if you're a Tesla shareholder.
- chrisseaton 5y ago> because literally every other publicly traded company that's ever existed has done this Wait you think there’s a model which perfectly predicts every company’s valuation ever? Why aren’t you using it to make a fortune?
- missedthecue 5y ago"Eventually return to the mean, given a long enough time frame" means that you should invest in index funds, which I do. It's not a ticker prediction algorithm that one can game or rinse/repeat for massive short term profits.
- TomVDB 5y agoThat's one of those classic disingenuous gotcha comments. The fact that there's a pretty common way to value public companies doesn't mean that you can make a fortune with it, because it sweeps aside the importance of time. Have you never heard of Keynes' classic "The markets can remain irrational longer than you can remain solvent" ?
- chrisseaton 5y agoIt’s not irrational to value a company based on the people working on it or what you think the potential of the product is, rather than just what their financials are doing right now. That’s what investors do everywhere - why do you think we have analysts looking at product plans and things?
- TomVDB 5y agoNobody claimed that future outlook isn’t part of the analysis.