How would you justify current TSLA stock price?
Ask HN: Are we in tech-stock bubble?
1–10 of 74 posts
Re: Ask HN: Are we in tech-stock bubble?
#2TSLA? No idea.
But I think there's often some hidden game going on with tech companies that go well beyond selling more sugar water and expanding overseas to places that haven't seen sugar water before.
Amazon is the best at this... using one business to launch a second.
So what I'd look for with TSLA is not whether cars can ever justify this price, but whether there is an adjacent business that is actually bigger than cars. Is there? I have no idea.
Re: Ask HN: Are we in tech-stock bubble?
#3Unlike the dot-com era, Tesla makes real things.
The valuation is unimportant as long as there isn’t something else for cash rich people to put their money into. Same for BTC or beach property.
Re: Ask HN: Are we in tech-stock bubble?
#4TSLA? Not justifiable from a pure numbers standpoint.
But - other tech stocks? Arguably justifiable. Since the risk free rate (treasuries) has cratered, this has altered the DCF calculation that analysts use to value a company (the outcome is essentially this: the company is worth more, because this risk free rate is used in discounting the PV vs FV of the company’s cash flows).
Thus, it makes sense to have companies worth more (compared to historical price-to- earnings comparisons).
Then on top of this, there is a somewhat deflationary force of tech companies providing more efficient means and processes to things - which further perpetuates the cycle of these companies being worth more (their inputs cost less and are less labile, and their outputs are greater than say, a mining or oil company)
Re: Ask HN: Are we in tech-stock bubble?
#5Every single person has no simple way to save money anymore. Savings accounts, CDs, and money markets - even high-yield online ones like Ally and Goldman Sachs - pay zero interest or close to it. Simultaneously the government has printed an absolutely incredible amount of money this year that has almost exclusively gone to the wealthy. This is because the fed is buying treasuries / corporate junk bonds and backstopping our entire economy while the actual economy has shrank maybe 10%. A tiny amount of the printed money is airdropped to citizens with direct checks or extended unemployment but this is a tiny amount that is primarily to buy off the commoners so they don’t complain about the enormous wealth transfer happening right now.
What this means is scarce financial assets are going to go up, and up, and up. Every person who doesn’t want to lose money needs to become a risk manager and start investing because there is no other option.
Re: Ask HN: Are we in tech-stock bubble?
#6TSLA? No idea. But I think there's often some hidden game going on with tech companies that go well beyond selling more sugar water and expanding overseas to places that haven't seen sugar water before. Amazon is the best at this... using one business to launch a second. So what I'd look for with TSLA is not whether cars can ever justify this price, but whether there is an adjacent business that is actually bigger th…
There is a secret sauce: pairing a company (Amazon.com) with heavy net operating losses (NoLs) with a very profitable company (AWS).
The result? Amazon pays zero taxes and can continually expand. The NoLs offset the profits, and every time Amazon has a division that becomes profitable they offset it by entering a promising but loss-inducing new sector. Then, when that division becomes profitable - rinse and repeat.
This is Bezos’ genius.
Re: Ask HN: Are we in tech-stock bubble?
#7Every single person has no simple way to save money anymore. Savings accounts, CDs, and money markets - even high-yield online ones like Ally and Goldman Sachs - pay zero interest or close to it. Simultaneously the government has printed an absolutely incredible amount of money this year that has almost exclusively gone to the wealthy. This is because the fed is buying treasuries / corporate junk bonds and backstoppi…
Its pretty crazy how no one is talking about how only 18% of the stimulus bill is going to individuals. I'm by no means rich but I made 80k passively this year so I don't know which side of the wealth transfer I'm on.
Re: Ask HN: Are we in tech-stock bubble?
#8Every single person has no simple way to save money anymore. Savings accounts, CDs, and money markets - even high-yield online ones like Ally and Goldman Sachs - pay zero interest or close to it. Simultaneously the government has printed an absolutely incredible amount of money this year that has almost exclusively gone to the wealthy. This is because the fed is buying treasuries / corporate junk bonds and backstoppi…
What do you think it's going to happen to real estate?
I'm a bit reluctant to invest in this market.
The situation you described has the potential to wipe off quite a lot of money there as well.
Re: Ask HN: Are we in tech-stock bubble?
#9[deleted]
Re: Ask HN: Are we in tech-stock bubble?
#10Every single person has no simple way to save money anymore. Savings accounts, CDs, and money markets - even high-yield online ones like Ally and Goldman Sachs - pay zero interest or close to it. Simultaneously the government has printed an absolutely incredible amount of money this year that has almost exclusively gone to the wealthy. This is because the fed is buying treasuries / corporate junk bonds and backstoppi…
Its pretty crazy how no one is talking about how only 18% of the stimulus bill is going to individuals. I'm by no means rich but I made 80k passively this year so I don't know which side of the wealth transfer I'm on.
It’s odd how it seems the US is capitalist on the way up, and socialist on the way down (for big co’s and industries
- airlines, banks, ect).
Good for equity investors. But - Individuals? We’re on our own. A bit crony, in my mind.