201–210 of 604 posts
Wasn't overvaluing the potential of newer companies over established institutions with significant holdings one of the hallmarks of .com bubble ridiculousness? I'm not particularly knowledgeable about finance and economics– if someone that is knowledgeable has some insight, I'd love to hear it.
What this says to me is that the stock asset class is broken. The value of a stock is supposed to be the amount of earnings you are expected to receive from it over its lifetime (adjusted according to the risk free rate or whatever). But today a stock's value can be influenced by a cool factor. Stocks that never pay any earnings can have high values (Amazon) and investor mania can out-live any attempted short. There…
> the value of a stock is supposed to be the amount of earnings you are expected to receive from it over its lifetime Who supposes that? I don't and I'm ready to pay a different price that you'd do. If there isn't a good reason for that, you might be able to take advantage from my position. Now, there are many reasons why I wouldn't price a stock as the sum of its (future) earnings. For instance, a company can be acq…
Well, you may want voting rights. But voting rights don't mean much unless you hold a lot of stock, and a lot of stock is non-voting anyway.
That leaves dividends and exits. An exit depends on someone having a value for the company, and can almost be looked at as a 'final dividend'. So I would essentially boil the value of most stock down to purely dividends.
If you buy it for any other reason, you are hoping that some other person will be willing to buy it from you later. Which means that other person needs a reason (voting power, dividends, or some other business move with external benefits).
But my appraisal is that many stocks exist today that have value simply because people think that other people will want the stock. It's inefficient, and at the moment of exit (death also counts as exit here) someone is left holding a bunch of stock that's worth less than what they bought it for.
Ford is sitting on almost $16 billion cash. Tesla, like Amazon, burns through cash as fast as they can turn it into scalable future stuff. Whether you consider this good or bad depends on your future outlook: Being long Ford is making a bet that the future will look pretty much the same. Being long Tesla is making a bet that the future will look different. (Plus the risks of believing that they can do what they say t…
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What is this based on? Ford has had record profits over the past few years and has continually improved their vehicles and manufacturing processes, including remaking two assembly plants to make aluminum body F 150s. They also invested a billion dollars in Arvo AI and are making aggressive moves into self driving technology.
Market perception. Ford's P/E ratio is 9.89. IBM's P/E ratio is 14.02. Facebook's P/E ratio is 40.79. Tesla's P/E ratio is infinity since the E is negative. I'm sure Ford has done many incremental innovations, I didn't say they didn't. IBM does the same thing, and has "record profits" every few years also. Its just the market isn't expecting the next big thing to come from Ford, while they are expecting that from Tes…
I don't short stocks because I don't believe in trying to time the market. I actually think Tesla could move well north of where it is currently trading. Not because I think they are going to grow to justify the valuation, but because I think lots of people will look at the $45 billion valuation and will incorrectly compare it to Amazon, Facebook (as you just did), Alphabet, and Apple and think $45 billion is low.
However I am long Ford. In fact it comprises the largest percentage of my personal portfolio. I continue to add more to it with every drop and just added more a few days ago. While the value has been dropping over the past couple of years, I've been collecting healthy dividends along the way ($F pays out now over a 5% yield), and am happy to sit and wait to see how long people will wait for Tesla to move beyond a niche auto maker and into the mainstream market.
Edit: One other point- this recent run-up is attributable to Tesla delivering more cars this quarter than expected, not because they just unveiled some new technology the market wasn't previously aware of. TSLA has been extremely volatile whether you've been long or short over the past 2-3 years. All it takes is one missed earnings report and it'll send this stock down at least 25%.
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What you said is correct but immediately raises the question "what's the value of that integration?" Obviously GM and Shell have been successful and profitable without being integrated, and it's not clear that merging would yield them advantages. Why do these advantages exist in the electric energy arena?
Can't predict numbers but some obvious integration points are... a) on the hardware side a solar panel customer could also buy the power wall (natural extension) and car, which can yield very high LTV per consumer; b) on the services side a fully autonomous ride sharing means low operating cost; c) if Solar City continues to lease out the panels then Tesla could become the biggest solar powered grid network on the pl…
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That's not how the math works out, according to Nasdaq.com Tesla's P/E was -53.63 for 2016 and estimated -103.48 for 2017.
Sorry I guess. I couldn't find Tesla's P/E ratio on Google like I could for the other companies. It is my understanding that they don't report P/E ratios for companies with negative earnings. And it makes sense: a high P/E ratio indicates high potential. The lower the earnings, the higher the P/E ratio. But if earnings went negative, then the P/E ratio would automatically go negative (since that is how math works, as…
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Investors invest based on promise of future value. How much is Ford expected to grow?
If they can properly pivot into the electric car market, a lot. Ford has all the infrastructure that Tesla is attempting to build now (aside from the batteries, but that is something that Ford could easily partner with another manufacture to get). They know how to mass produce cars (granted right now, ICE cars). That's not an easy feat. They have a large manufacturing and maintenance base that, frankly, Tesla can't r…
>> How much is Ford expected to grow?
> If they can properly pivot into the electric car market, a lot.
Big car OEMs have so much invested in terms of R&D, brand and emotionally in the combustion engine that I think most are just not going to be able to make the jump to EVs. Nissan and BMW are trying, but they are still making really baby steps.
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To a much lesser degree. An electric engine is a lot simpler, mechanically, than an ICE. To the point that, I think, major malfunctions will result in replacement of the engine instead of fixing engine components. Given good refurbishment logistics, this is much more efficient.
I'm sorry, but that's just not true. The basic premise of an electric "engine" is simpler than that of an ICE, but when you actually make the car, it's nowhere near as simple on paper. Just look at the issue people have had with getting Tesla's repaired... the "mechanics" don't even know that you have to keep the battery charged. Also, don't ignore the fact that we have 100+ years of experience with ICE.
I've been through the CRT -> Flat screen television phase in India.
Arguments were typically like these. How will TV repairmen fix these new TV's which have move like plug and play internals. Therefore new flat screen TV's won't sell?
In the end it didn't work out well for TV repairmen. If its easier to identify and swap the malfunctioning part, you need lesser and lesser skilled professional to service these goods. You can dumb down the process to a point anybody can do it.
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If they can properly pivot into the electric car market, a lot. Ford has all the infrastructure that Tesla is attempting to build now (aside from the batteries, but that is something that Ford could easily partner with another manufacture to get). They know how to mass produce cars (granted right now, ICE cars). That's not an easy feat. They have a large manufacturing and maintenance base that, frankly, Tesla can't r…
I highly recommend Wired's article about GM's long-term bet in developing the Bolt. It talks about many ways that developing an electric car is not just a matter of adding batteries to your existing expertise in car manufacturing. e.g.: > Nearly everything changes when you opt for a fundamentally different power train, so GM’s greatest advantage—more than a century of experience building cars—was all but moot. Car st…