Some insight for everyone in doubt about TSLA and my short story about a great investment. (And do NOT short TSLA unless you like the pie in the face!)
First of let me clarify the 3 major time frames (and trading/investing casts) that one must distinguish before any argument about a stock price, otherwise it won't make any sense:
1. Short term (day trade/swing trade) -please note, vast majority of day traders lose 2. Mid term (swing trade/speculative investment) -to invest mid term is even harder as we don't have a crystal ball and anything can happen, though swing trading is a usable method that can generate profit for the educated trader 3. Long term (investment) -one have to study a company, consider a wide range of possible scenarios and know fundamentals well enough
The reason why this is important to understand ahead is that for example if one argues about a short term stock price action, it would be inaccurate and invalid to solely rely or lean upon some long term fundamental fact about the company, even though it is a fact, it would be used mistakenly at the short term argument especially regardless of the current situation and momentary pricing of the market. Same thing applies the other way around: if one would argue about the mid term or long term price outlook of the stock based on the very current price action it would similarly be misleading as you already heard "past performance does not guarantee future....bla bla" etc.
Bear with me - or shall I say bull with me - now as the real TSLA example story is unfolding right here:
Summer of 2019: I was still talking about Tesla. How great an idea, what a cool car, I want a solar roof and so on. And as Dave Lee used to say "do your own research" so I did. I figured, this company will grow in a rate of about 50% / year for the next 5-6, maybe even 10 years, so I'm not afraid that I won't be able to get my solar roof and my car (the Model 3 was my aim to get). Also it's a hell of a passive investment, or show me please a similar yield that I could count on for almost a decade ahead. Can U? Not likely. But never mind, this is not important now, let's get back to the story. End of 2019, so far so good, I also listened to Musk and not just listened but understood what he talked about. Also have to say, I believed him, as it seemed to me, if he was only about the money and not some greater good, he would already be partying on a private island with his family and friends for the rest of his life and not investing it all in very risky businesses like an electric car company full of uncertainties not to mention SpaceX and the others. But he did, so at the end I came to the conclusion that this thing is quite genuine and trusted. No need to worry about it.
I know you wanna know the stock price now so I jump forward the the math, I even did it for you, so just read and understand, this is based on the fundamentals (I rounded as it can't be too exact anyway):
Now as you see, this is according to Elon (his statement about the 50% annual growth from 2019) and now please check the chart and note 2 horizontal purple lines. The first is at the 4th of Feb.2020. That is when the stock was around $800-$900 so I said: this is too fast, too high, not possible that it's normal. "SELL NOW!" It was scary. Because "time is more important than price" -as David Frost says. And in a day or so, price dropped 26% though recovered swift and followed by the Covid sell off, that's hystory. Are you getting my point now? Maybe not yet, but hold on, confirmation comes right at the other horizontal purple line, that was Elon's tweet at the 1st of May 2020, he said: "Tesla stock price is too high imo" at $800. And it dropped only 13% and recovered fast again. So the majority of the so called followers are not really listening to him or at least not believing him, this is what comes out of it at first glance. Anyway, after the moral of the story, let me finish with the conclusion and the final, important thought, the final say:
No matter if the basics, the fundamentals or any underlying (supposedly) market driving truth tell or show you something, as at the end of the day, market sentiment, the actual supply/demand is what will determine the stock price at any given moment. So even though if it is true that the stock is way overpriced, if each and every one of you holding and buying the shares think otherwise and/or willing to hold your shares for no less than 3-5 years...
You can finish the thought, this way it's gonna be your own, and not my words. Trade safe.
Lol you are a word smith, but I was always taught to use the lest amount of words possible to illustrate my point. If I may attempt a short summary of your exposition, “BUY TSLA”
janfoux
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@SwissVegaPhyle, :D Naaaa, noooo, Noooouuuu. :D Time is more important than price. So OK, yes for "buy TSLA" but "when?" is more important. And I would say the summer of 2019 for that question.
janfoux
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@SwissVegaPhyle, My problem is only with these new retail Robin-FOMO investors (no offense for the exception) who buy stocks instead of their usual gamble habits, blindly buying while repeating some phrases heard from a youtuber and expecting to get rich quick. But as they reach the expected 20-40% profit or even more, they still not selling, instead they convince their friends to jump in and get rich quick, and so on. As this goes exponential, creates a bubble. An unreal situation. But if nobody sells, no one gets rich and the price never goes down, but it's all "in paper" and not reality. Until a day when everyone gets tired of waiting and calls their broker asking to sell their stocks and that's when the broker turns to an owl and says: "to whoooooo, to whooooo?" :D
But jokes aside, what my latest thought was is that theoretically if each and every member of a bubble holds on to their stock, it's never gonna pop because of the well known supply/demand price drive. And this is kinda sad as in a few years investors are going to get disappointed because of the price halted for such long time and they'll start to sell slowly. Thus the price go down a bit, but then the smart money comes back in, and hold it up and so on and so on. So, at the end TSLA won't be a good investment any more. It only WAS.