Author Topic: Tesla worth more than Ford  (Read 1004 times)

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Offline daniel1948

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Re: Tesla worth more than Ford
« Reply #15 on: April 04, 2017, 06:57:04 PM »
I would not tell anyone to buy Tesla stock right now. The thing about the stock market is that it's not whether the company will be successful, it's whether the market is over- or under-valuing a company.

I believe that Tesla will be successful in the long run because they are building great cars and there are a lot of people out there who are enthusiastic about a car that consumes half as much energy as a Prius, that being electric you can make that energy on your roof, that is fun and zippy to drive, and gets 5-star safety ratings in every category. Electric cars are not for everybody, but that's fine because all the EV makers today could not come close to filling the demand if everybody wanted one. What matters is that the demand is there for Tesla to sell every car it can build for the next few years, and probably beyond that, as public awareness and enthusiasm grows as more electric cars hit the roads.

As for my shares of TSLA, I don't care what they're worth. I own them because it makes me feel like a part of the company, so I probably won't ever sell them. When I die my executor will sell all my stuff, but while I live their market value means nothing to me. I just love what Tesla is doing, and I love driving my car.
Daniel
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Offline murraybiscuit

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Re: Tesla worth more than Ford
« Reply #16 on: April 04, 2017, 09:58:21 PM »


I believe that Tesla will be successful in the long run because they are building great cars and there are a lot of people out there who are enthusiastic about a car that consumes half as much energy as a Prius, that being electric you can make that energy on your roof, that is fun and zippy to drive, and gets 5-star safety ratings in every category.

How does Tesla aim to drive ongoing revenue apart from sales? Do you service yours? Is Musk hoping to sell the battery / domestic power ecosystem off the back of the car sales?

Offline daniel1948

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Re: Tesla worth more than Ford
« Reply #17 on: April 05, 2017, 09:39:35 AM »
I am not privy to Tesla's business plans for the future. I do not service my own cars. I take the Prius in for an annual oil change (all it needs, since I only drive it on one long road trip per year and a few extremely short errands.) Tesla sends a mechanic (they call them "Rangers") to my home for service. There's an annual maintenance service, and any needed repairs (which have been few and minor).

I think it's a reasonable assumption that Elon Musk understands business well enough to make Tesla successful. If he were to explain it all to me, I probably would not understand it. There are likely people who could answer some of your questions, but considering what he has accomplished (PayPal, Space-X, the Roadster, Model S, etc.) I am inclined to view the nay-sayers with skepticism. Nothing is certain, but I am optimistic for the long term success of Tesla.

I put little confidence in the market value of any stock. And except for a few shares of companies I like, I don't buy individual stocks.
Daniel
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Offline Fast Eddie B

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Re: Tesla worth more than Ford
« Reply #18 on: April 05, 2017, 11:22:14 AM »
Over the last year or so I've acquired 100 shares of Tesla. My average basis is $217.

I acquire stocks like this as "flyers" more than investments. Over the years I've done well with speculative stocks like this, with gains in Netflix, Amazon, Google, eBay, Facebook and the like. Most of my portfolio is in more conservative investments, but all of my big gains have been from "flyers", far exceeding losses in similar stocks.

As an aside, I think terms like "overvalued" and "undervalued" have no meaning except in retrospect. In a free market and without manipulation or inside information, a stock is always fairly valued, in that a roughly equal number of buyers and sellers exist at any price point. As I write this, Tesla is worth exactly $301.25, no more, no less. It is, at this moment, exactly as likely to go up as to go down.

If a year from now, Tesla is at $800, we can all agree it was an undervalued bargain at $301.25. If it goes down the tubes, we can all talk about how obviously overpriced it was at $301.25. The key is this only makes sense in retrospect.

My opinion is formed by decades of hearing talking heads pontificate about stock values. For instance, go back in time and you can find those saying Apple was overpriced at $20. It's now at $145, and that's with multiple splits of 2 for 1 and one at 7 for 1.

I recommend Taleb's "Fooled By Randomness", which I think informs my opinion as well.
« Last Edit: April 05, 2017, 11:25:15 AM by Fast Eddie B »
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Online Ah.hell

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Re: Tesla worth more than Ford
« Reply #19 on: April 05, 2017, 11:55:05 AM »
You can look at things like price to earnings ratios and Tesla's is way out of proportion relative to other car makers.   Which could be fairly described as over priced.  I think its priced at what it may be worth in 20 years personally.  Which is a bit of a gamble.  If he can get a reasonable priced model with a decent range out in the next few years, it will be worth every penny.  If he can't, it won't be.

Offline daniel1948

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Re: Tesla worth more than Ford
« Reply #20 on: April 05, 2017, 01:25:20 PM »
I disagree with the notion that whatever price the market sets is by definition the fair value. For one thing, there is asymmetry of knowledge. For another, there are bubbles. Market price arises from both subjective factors and emotional ones. There are things like the value of physical plant and inventory, then there are things like the skill of management, then there are things like consumer confidence and enthusiasm. And then there are investor expectations. And to add confusion to it all, there are people in the market actively manipulating share price through such nefarious means as naked short-selling. (Which is illegal but hard to prevent.)

In my opinion, the "real" value of a stock is related to assets, debts, technological/intellectual property, competence of management, and profits, with the proviso that a new company can have value even if it needs inflows of capital to meet its goals. This is the case with Tesla. It is growing so fast that there are no profits, because the profits from sales are being plowed back into development and growth. But it is selling cars for more than the long-term cost of making them and has an enormous and enthusiastic customer base.

I cannot do the math and tell you what the "real" value of the stock is, or whether the market value is based on overly-enthusiastic investors bidding it up too high. But I do believe that the company is solid and will succeed in the long run, regardless of how much investors are will to pay for the stock.

I think my basis is around $40 or $45. On paper I'm a few thousand dollars ahead. Dollars I'll never see because I'll sell mutual fund shares, if I need cash, before I'll sell my share in a company I think is super-cool.
Daniel
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Online Mr. Beagle

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Re: Tesla worth more than Ford
« Reply #21 on: April 05, 2017, 01:48:51 PM »
It is more about who is investing and their risk tolerance, rather than about "value". The Ford and Tesla investor groups likely do not overlap except in merged mutual funds, so the definition of "value" is in two different languages.
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Online Ah.hell

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Re: Tesla worth more than Ford
« Reply #22 on: April 05, 2017, 01:54:49 PM »
It is more about who is investing and their risk tolerance, rather than about "value". The Ford and Tesla investor groups likely do not overlap except in merged mutual funds, so the definition of "value" is in two different languages.

This is true and Tesla is priced much more like a Tech startup than a car manufacturer, which it sort of is.

Offline Fast Eddie B

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Re: Tesla worth more than Ford
« Reply #23 on: April 05, 2017, 03:36:38 PM »
It is more about who is investing and their risk tolerance, rather than about "value". The Ford and Tesla investor groups likely do not overlap except in merged mutual funds, so the definition of "value" is in two different languages.

As a point of information, I own both Tesla and Ford, but for different reasons.

I consider Ford, in which I'm down a bit, an investment. It currently yields about 5.3%, so even if the price is down a bit, funds parked there are still earning a solid return.

As far as Tesla goes, I'm with Daniel - I hope it does well, but mainly like having an interest in a very dynamic company.
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Online Mr. Beagle

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Re: Tesla worth more than Ford
« Reply #24 on: April 05, 2017, 04:48:12 PM »
It is more about who is investing and their risk tolerance, rather than about "value". The Ford and Tesla investor groups likely do not overlap except in merged mutual funds, so the definition of "value" is in two different languages.

As a point of information, I own both Tesla and Ford, but for different reasons.

I consider Ford, in which I'm down a bit, an investment. It currently yields about 5.3%, so even if the price is down a bit, funds parked there are still earning a solid return.

As far as Tesla goes, I'm with Daniel - I hope it does well, but mainly like having an interest in a very dynamic company.

At this price, I think Tesla falls into the "lottery ticket" category. It can be fun in small quantities, usually disastrous in large quantities, but there is always that guy who holds the winning ticket...
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Offline The Latinist

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Re: Tesla worth more than Ford
« Reply #25 on: April 05, 2017, 06:28:02 PM »
It's speculation, not real value.
I would like to propose...that...it is undesirable to believe in a proposition when there is no ground whatever for supposing it true. — Bertrand Russell

Online NEKSkeptic

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Re: Tesla worth more than Ford
« Reply #26 on: April 05, 2017, 07:45:15 PM »
Keep in mind that Tesla stock has a TON of short sellers. 

Offline Fast Eddie B

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Re: Tesla worth more than Ford
« Reply #27 on: April 05, 2017, 07:55:32 PM »
It's speculation, not real value.

I still hold its "real value" (read: current value) is based on investor's confidence in future earnings. Or something.

If people are buying and selling tulips for $1, the "real value" of a tulip is $1.

In a mania, where a tulip might sell for $1,000, the "real value" is $1,000.

As long as buyers and sellers come together and agree on a price, that is the "real value".

Same goes for a rare penny, a Warhol or Picasso, a misprinted stamp, an ounce of gold or silver, a prized shortstop, a Ferrari, or anything else you could name.

"What's it really worth?" might be fun to argue about or pontificate upon, but I think the calculus is far simpler than that.
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Online Mr. Beagle

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Re: Tesla worth more than Ford
« Reply #28 on: April 05, 2017, 07:59:10 PM »
It's speculation, not real value.

I still hold its "real value" (read: current value) is based on investor's confidence in future earnings. Or something.

If people are buying and selling tulips for $1, the "real value" of a tulip is $1.

In a mania, where a tulip might sell for $1,000, the "real value" is $1,000.

As long as buyers and sellers come together and agree on a price, that is the "real value".

Same goes for a rare penny, a Warhol or Picasso, a misprinted stamp, an ounce of gold or silver, a prized shortstop, a Ferrari, or anything else you could name.

"What's it really worth?" might be fun to argue about or pontificate upon, but I think the calculus is far simpler than that.

However, it is the value only for the marginal buyer or seller, the person considering buying or selling right now. For people not buying or not selling, the price is NOT the value. And arguably there are more of them than marginal buyers.
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Offline daniel1948

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Re: Tesla worth more than Ford
« Reply #29 on: April 05, 2017, 09:22:06 PM »
It is more about who is investing and their risk tolerance, rather than about "value". The Ford and Tesla investor groups likely do not overlap except in merged mutual funds, so the definition of "value" is in two different languages.

As a point of information, I own both Tesla and Ford, but for different reasons.

I consider Ford, in which I'm down a bit, an investment. It currently yields about 5.3%, so even if the price is down a bit, funds parked there are still earning a solid return.

As far as Tesla goes, I'm with Daniel - I hope it does well, but mainly like having an interest in a very dynamic company.

At this price, I think Tesla falls into the "lottery ticket" category. It can be fun in small quantities, usually disastrous in large quantities, but there is always that guy who holds the winning ticket...

At this price I agree with you. I bought it when it was around $40 or so. I don't remember whether they had started selling the Model S yet, but if not it was in the pipeline. "The market" seemed to think that electric cars were crazy. I loved my Roadster and believed the Model S would be a big success.

At $295 I'm not buying any more shares, though if they issued bonds I'd consider them seriously. I have some Solar City bonds (now part of Tesla, though the web site for my bonds still says Solar City) and will consider buying more when they have another issue. At present it appears they don't.
Daniel
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-- Otto von Bismarck