OT: Stock and Investment Thread
- Thread starter RU05
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What’s that thing called the theta value for options? You just proved my point about timing. Yes, less risk with puts because you limit downside and can be a good hedge. but it’s still about timing, especially if you want to take directional bets.
These guys explain it a lot better then I could:
Tesla Price Target: Tesla's Potential Trajectory During the Next Five Years (ark-invest.com)
Dear Elon: An Open Letter Against Taking Tesla Private - ARK Invest (ark-invest.com)
What was the PE of Amazon and Netflix 4 years ago? The companies that revolutionize an industry in as dramatic way as these companies and are lead by visionaries that are beyond our understanding will do well. Now if something were to happen to Musk, then everything changes. That is the biggest downside risk, IMHO.
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Sir,
You and I play the game a little differently. I am not afraid to invest in individual stocks. I have been doing this for long enough to realize that some people are more risk averse than others. You clearly do the research and are on top of things. You are just afraid to take the next step and invest in individual companies within the sectors. That's what separates the men from the boys. There is nothing wrong in being risk averse and growing the portfolio slowly and steadily.
This is exactly why I bought Tesla. in the early 2000’s I read an article in WSJ about how overpriced Amazon was, hadn’t made any money, etc. Considered shorting it but thankfully did not. i Bought Tesla (small position) because it was the only company I could could think of that had Amazon like potential and I didn’t want to miss out. Got lucky.
If you believe in Tesla for the next 10+ years, definitely hold and enjoy. But the price is going to come down soon for the reasons Friday cited. When? Don't know. How much? Don't know.
FYI, I'm a huge fan of Tesla! I likely own more of Tesla than any other individual stock right now via funds (even though my managed funds are cutting it back due to the overvaluation).
A lot of cnbc talk, even before this weeks run, was sometime in January.
Though one of those opinions thought a blue wave might trigger it, and that was obviously not what happened.
People that point to the lack of earnings for these companies that are changing the landscape and are growing like crazy are looking at it all wrong.
Now I think TSLA is scary high as well, but it's not the lack of earnings that has me spooked.
Yeah, those businesses actually made money, though. Amazon made a ton of money if you normalcies marketing expenses.I could understand those. Not TSLA, though. Congrats on a terrific bet. In my view, TSLA will not end well from these levels. Edit to add after reading the “research” listed, im still waiting to hear a coherent case,
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Exact same comments, from investors with the exact same framed reference, in 99 and 2000.
Puts limit your downside. Shorting a parabolic stock with no tether to any valuation places the seller at much higher risk. Trying to time anything isn’t a winning strategy.
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Up to 7.75. Nearly doubling since I bought in around 3 pm yesterday.
My first stake was super tiny, so I moved some cash around and doubled my stake. BTBT went to $30, I'll sell half my position if FTFT get's to $15, which would be about 3.5x my original position and double my secondary, see what happens after that.
If I had a bit coin for every reference to 2000 I'd seriously have a lot of money.
Your tax bill would be what the stock gained since Christmas. It's a ridiculous notion to put embedded gains at risk because you don't want to give back the gains of the last 2 weeks.
Seriously though I agree it's overvalued, but TSLA is the best in class in what is obviously an exploding industry. This is not the dot.com bubble. Is it overvalued, or even way overvalued? Maybe, but I just don't think you can compare TSLA to the dot.con bubble.
This thing had revenues of 30 billion last year. It's estimated to be 70 billion in 2023. Maybe I do need to learn something here, but show me the dot.com bubble comparison.
Why don’t you start trying to answer the questions about TSLA I listed earlier in this thread? Given the tone of your responses, I believe I’ve taught enough,
You might be talking to the wrong person, I bought and sold TSLA in the summer. I sold because I thought it was overvalued.
But not because of the lack of legit earnings.
Unfortunately off to work, I'll look back at your questions later.
No, I am talking precisely to the right person.
Famous words before a cyclical correction from those who haven't experienced an inevitable market pullback:
"But THIS TIME it's different."
+1
For the one Amazon that changed the landscape, there are hundreds that no longer exist from that time. Easy to talk a big game during the raging bull market when everything is going up.
The comments now are almost verbatim. “You’re not looking at it right,” or “you don’t understand the new way to evaluate.”
Here‘s what should be understood.
owning a stock is owning a proportional share of a business entitling the holder to their share of cash flow and income. Businesses that will change society are great but not good investments if they fail to deliver the aforementioned items to shareholders. To justify any valuation, you need to understand when income and cash flow will justify the price paid. The longer out, or more speculative, the realization of said cash flows, the lower the valuation for a rational investor. Of course, that’s in comparison to the potential size of said cash flows. This time is the exact same as every other time when it comes to these Investing truths.
This is exactly like the dot.com bubble. Changing the landscape? Check. Exploding new industry? Check. No profit? Check. Promising of the future? Check.
I was in business school (RU MBA) during this time and watched it closely. Amazon was the game-changer. It was the winner that deserved the hype and overvaluation, but once again, there were hundreds of others via for this throne as well.
Is Tesla the new Amazon of this time? The answer very well be yes. But remember, even Amazon's stock price took a HUGE dump after the irrational enthusiasm wore off. Sooner or later, a company needs to make money.
+1
Frida - I don't remember your age, but I think we are peers (perhaps you have a few years on me). Seriously, some of these posts are deja vu! Same exact statements from 99/00. Great stuff! LOL.
It’s like playing blackjack. You can improve your odds but house will win majority of the time. Plus, TSLA is in just about every growth fund I have. Not really naked on the shorts. Even with my losses on the shorts, I was up 15%.
And anyone who is in that position and doesn't take some money off the table is nuts. Who says you have to sell it all?
Didn’t Amazon have fantastic earnings from its cloud service while losing a ton of money in its retail side?
I agree with you far more than not however, this mkt, the 'bubble' is not broadbased and the mkt is driven by a sector. I do think we see a correction but one can still do well in that correction given Reits, energy, travel, and some others are still at 'depressed' value do to externalities (Chinese virus)
I agree and if you don’t because of taxes you are making a mistake
Kids. This sounds like what heard about the Nifty 50 circa 1970 when I wasn't legally old enough to buy stock but had a summer job on the street doing stuff a computer does now.
Didn’t have the cloud service back then. This was when they had just begun expanding beyond books. Maybe the year 2000? They were losing money hand over fist.
Well, my concern for the overall market is the percentage of the S&P, for example, made up by the top 5 names by market value. We’ve covered TSLA. What about Apple? Great business, no question, with huge earnings and cash flows, but how do you justify a 27x TEV multiple for a business that large? How can it grow at a clip to justify that multiple? Of course, it can’t. Now, that’s a terrific business. But it’s way overvalued.
The comments are a lot like the dot com bubble, the most famous being that P/E wasn’t important, eyeballs were the metric. The major difference now is zero percent interest rates. There is nowhere to put your money for a return. Not only that, just yesterday a report showed that since COVID started, there’s been a vast increase in household savings that are still on the sidelines. Having said all that, of course there will be a correction. There always is. The only question is when and how bad.
Morningstar's Analysis
2 stars - overvalued (FYI - 3 stars is fair value; 1 and 2 are overvalued; 4 and 5 are undervalued)
AAPL is at a 54% Premium.
Fair Value: 85.00
Last Close: 130.92
Uncertainty: High
Economic Moat: Narrow
1-Star Price
> 131.75
5-Star Price
< 51.00