4 ms·
It is easy to say in hindsight but consider the case of Iomega. https://markets.businessinsider.com/news/stocks/big-short-investor-michael-burry-warns-day-trad
by sireat 5y ago
It is easy to say in hindsight but consider the case of Iomega.
https://markets.businessinsider.com/news/stocks/big-short-investor-michael-burry-warns-day-traders-iomega-stocks-2021-1-1030019077 https://markets.businessinsider.com/news/stocks/big-short-in...
In 1997 a friend who worked at Cisco told me to go all out on Iomega. He also advised me to invest in some 3D storage startup which well went nowhere. No matter how smart you are you just have to play percentages.
Even better consider the case of Cisco itself. It reached market cap of 500B around 2000 and despite being a solid company has not performed too well.
Thus it is quite conceivable that the inevitable market correction will bring the high flyers down.
That is Apple will still be extremely strong, Google might suffer a bit because of dropping ad spend.
Companies such as Shopify, Tesla will actually need to reach reasonable P/E ratios, not the insane ones now.
- gitfan86 5y agoTesla is trading at a 50x PE (2022 consensus) and plans to grow 50%+ in 2023, 2024. I don't think that you can expect the stock to be where it is today in 2024 if the PE actually goes down to 12. You'll need to buy it now to lock in that PE of your purchase price.
- sireat 5y agoIt is trailing 170 P/E, obviously trailing earnings are not so useful for high growth companies but question is Tesla really a high growth company any more? The consensus is that Tesla is not priced just for cars, it is priced on some other "intangibles".
- gitfan86 5y agoElon has said that Tesla's advantage will be manufacturing. If he is right and the global demand for EVs continues to accelerate, TSLA's PE will be below 6 at current prices before it is no longer growing 20%+ a year.