4 ms·
Tesla might be the biggest extinction threat to GM, Toyota, VW and the other big guys. Don't you think they would pay $23B to, not only extinguish that threat,
by DVassallo 13y ago
Tesla might be the biggest extinction threat to GM, Toyota, VW and the other big guys.
Don't you think they would pay $23B to, not only extinguish that threat, but also gain from the upside?
In my mind, if someone may be willing to pay $23B for something, it's worth $23B. That's why I think the valuation is quite fair.
EDIT: Fixed typo
- cheriot 13y agoIf an acquirer would pay $23B and the market values it at $23B then you don't make any money. Meanwhile you take the risk of holding a high flying stock. Maybe you're right, but it's a gamble.
- erikpukinskis 13y agoYou just described every stock on the market. If it's not a gamble then people buy it and the price goes up until it's a gamble.
- cheriot 13y agoYou're arguing for strong market efficiency. There's nothing wrong with index funds, but that doesn't explain why Graham, Dodd, Buffet, and similar investors have out performed market indexes for so long.
- erikpukinskis 13y agoA stopped clock is right twice a day. If you compare random subsets of index funds (i.e. take a random half of the stocks in the fund and call those a new fund), some of those will consistently outperform the indexes too.
- deleted 13y ago[deleted]