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Share price reflects expectation of future profits and growth. When you buy a share you do not care about the profits in the past, you care that the company wi

Share price reflects expectation of future profits and growth. When you buy a share you do not care about the profits in the past, you care that the company will generate profits and thus increase its value in the future. The only reason people care about past profitability is in how it can help you predict future profitability. This is also the reason why companies can be generating losses quarter after quarter and still be gaining value -- as long as there exists expectation of future growth and profit. And in case of Tesla a lot of this expectation of future profits and growth was based on charisma of its owner and on belief that he is the force behind Tesla's spectacular success. Starting one successful company is impressive but can be partly attributed to luck. Starting multiple hugely successful global multi-hundred billion dollar companies is not luck at all, especially when you spend a moment learning about Elon's work ethic and his tight grip over everything. Now, if you are an investor, it seems the owner lost its focus and made a bunch of questionable decisions. This puts a huge question mark on whether he will be as involved and as effective with Tesla in the future.

deleted 4y ago
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kjksf 4y ago
> in case of Tesla a lot of this expectation of future profits and growth was based on charisma of its owner Not even a little bit. Musk has a charisma of a bag of potatoes. What matters is that Tesla had 10 years of 50%+ revenue and unit growth, on average. They performed better than any of the FAANG companies. With Giga Berlin and Giga Texas ramping up, Cybertruck, refreshing Model 3 for lower cost of production, ramping 4680 battery production, lithium refinery in Texas, Inflation Reduction Act in US => the 50% growth the company is guiding for in the next several years seems to be in the bank.
- twawaaay 4y ago
  What charisma is depends on the person. It is defined as ability to induce devotion in others and different people will get moved by different things. Charisma is not an absolute and objective measure. Some people will find Trump charismatic to them, some people will see him completely opposite. I personally find Warren Buffett very charismatic, some people will probably see him as an old and wrinkled guy who is boring them with stories they don't care about. As investors are generally mostly interested in money, ability to get shit done and generate profits reliably IS charisma.

deleted 4y ago

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kjksf 4y ago

> in case of Tesla a lot of this expectation of future profits and growth was based on charisma of its owner Not even a little bit. Musk has a charisma of a bag of potatoes. What matters is that Tesla had 10 years of 50%+ revenue and unit growth, on average. They performed better than any of the FAANG companies. With Giga Berlin and Giga Texas ramping up, Cybertruck, refreshing Model 3 for lower cost of production, ramping 4680 battery production, lithium refinery in Texas, Inflation Reduction Act in US => the 50% growth the company is guiding for in the next several years seems to be in the bank.

twawaaay 4y ago
What charisma is depends on the person. It is defined as ability to induce devotion in others and different people will get moved by different things. Charisma is not an absolute and objective measure. Some people will find Trump charismatic to them, some people will see him completely opposite. I personally find Warren Buffett very charismatic, some people will probably see him as an old and wrinkled guy who is boring them with stories they don't care about. As investors are generally mostly interested in money, ability to get shit done and generate profits reliably IS charisma.