Originally Posted by
Trip7
You can say traditional metrics are out of the window, but at the end of the day the basic principle of investing remains forever. When placing their capital with a company, an investor is buying a piece of a company and the goal is to get a return on their investment.
Right now when you buy a piece of Tesla'a business without growth you will get your money back in 358 years based on current earning(FCAU 8.3 yrs for comparison). Moreover, the intrinsic value of a stock is it's future free cash flows discounted to the present value. Right now Tesla is priced as if 90% of the world's cars will be Tesla and then some to achieve the required cashflow. Will Tesla out innovate every car company in the world for the next 10 years and have monopoly status in the auto industry? All self driving cars will be Tesla? Everyone's home will be powered by Tesla? All cars will have Tesla battery technology? There are some pretty bold bets given the current price
I'm not saying Tesla won't be a successful company. I think it will be. Do I think 10 years from now Telsa investors will make any money if they buy today and hold? Absolutely not. Right now successful investing in TSLA is based on the greater fool theory. Eventually the price will become so absurd there won't be any fools left to trade to. On that day, I wouldn't want to be stuck holding the bag
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I’ll respectfully disagree. https://www.computerworld.com/article/2575106/amazon-records-first-profitable-year-in-its-history.html
I remember when AMZN has its first full profitable year. I spent an entire semester of college in business school discussing AMZN vs WMT. Logistics. Balance sheets. Supply. Demand. Everything. Amazon would never ever ever ever exceed WMT. AMZN was around $45-50 at that time. We all had the same consensus. I watched for two years using the same little tools and everything you had in your post. Amazon was over priced. Revenue wasn’t enough, wasn’t sustainable, etc.
That was at $50-200 a share. Now $3,229 a share. Insane.
Same concept with Netflix. The biggest effing fail of my life was listening to some zacks or morning star garbage about how a company that mailed DVDs was overvalued at $40.
Not even a decade later my small investment would be worth $600,000 had I kept that money in NFLX.
Bottom line is—do your own due diligence and look at the future, study a company, and know the financials behind what they’re doing. Don’t give a rip what some widget on a website says about a stocks share price.
Trip 7–I have TSLA. I had 68 shares. Then reverse split this summer announced. 5:1. $17,700 is what I paid for that. That investment is now worth a small house.
Same with AAPL. That thought process that you presented isn’t a blanket approach.