16 Aug 2020
What are your thoughts on Tesla’s rise in stock price? Is it a short term spike or do you foresee it growing exponentially long term?
Hi, it is a growing company, but it won't be forever exponential. Its estimated to stabilize around 2030.
And yes, the stock price is high. That's because it reflects what Tesla can do in the future: a fleet of robotaxis. Imagine Grab, but without drivers. With full self driving, Tesla will disrupt the entire taxi industry. But that's not all, they will be having their own insurance, battery tech, app store. If you look for their competitors, there are practically none, all of them are way behind in terms of tech and self driving AI. It will be years before any of them catch up.
So yes, Tesla is expensive now. So was Amazon, Google, Apple in 2010. Look at where their stock price are now. The price in 2010 will seem cheap to everyone now.
If you want to find out more about Tesla, I talk about it in depth in this video: https://youtu.be/hHErfQOvvek
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Tesla has a great narrative. Great leadership. Proof that their idea works and is gaining traction (albeit not in SG). They have also been building factories in US and China, proving their expansion and ability to scale and reach a larger population.
However they are greatly overvalued. The PE ratio is out of this world. In addition, they recently managed to achieve profitability for 4 consecutive quarters. Although good news for investors, but also proof that they are still a relatively new company.
If you are willing to bet on them, and hold throughout, I think it can be a small part of your portfolio. More of my thoughts here. https://strongandfrugal.com/my-take-on-tesla-st...
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Yes. More than a short term spike, its highly volatile and speculative for a long term investment......
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