“Tesla is a huge risk for most investors,” he said


Tesla’s stock is very expensive. It is higher and can reward shareholders.

There is no law that prohibits foolishly priced from morally expensive. And for some as a baby gets older, he or she will outgrow this.

Disappointing expectations and problems arose when shareholders were hoping to find the lowest atmosphere in the thin air beneath them.

Last week, the maker of electric vehicles was listed on the S&P 500 index and struggled. But they have grown an astonishing 690 percent this year, and now have a market value of $ 617 billion.

The current price is fixed Tesla It is the sixth largest company on the S&P 500 and its shares are expensive in any metric.

The total cost and revenue for the S&P 500 is currently 22.3 times the estimated revenue for the 2021 deal. Tesla shares traded 168 times.

That’s right. TSLA revenue is expected to grow rapidly in the next few years. However, the shares are estimated to be 77x of the deal by 2024. If this is expensive, then look at the price multiplied by the selling price. While Tesla is above 13x, the average price-to-sales ratio of the S&P 500 is 2.7 times.

What went wrong?

With a little bit of ideological momentum, stocks are actually emerging and becoming very long-term investments.

But many do not. Apple Amazon and Microsoft’s famous success stories tell investors that their decisions are bullied; Ignoring assessments and creating effective reminders.

Despite rising stock prices, is this a very good investment opportunity with a market capitalization of US $ 616 billion?

The company now owns Ford, GM and Toyota have more than two market values. Can I get three times a day? may be.

One thing is for sure, it’s going to happen no matter what the path. Down or Down – The Wall Street Cart Rhythm will sing “Yes, I Know”. As history unfolds, so does history.

Think before you buy

Thinking of buying Tesla shares? Two: Equivalent to everything else. When you buy stocks at high prices, your expected future profits will fall.

Second, all high-growth companies are looking forward to a bigger future.

When that development is successfully implemented, Amazon, Just like companies like Facebook. But for Amazon and Facebook, there are many companies struggling to survive the recession.

The key is to build a successful company; In order to build Microsoft and Tesla, great ideas and exemplary work need to be combined with good fortune and good times.

In the late 1990’s, the dot-com bonanza was full of exciting companies. But they did not reach the level of Tesla.

Why Tesla is not special

My friend Jim Cramer Recently opined on CNBC Tesla deserves something that other companies do not deserve.

“Tesla is a stock that can shatter the way we view stocks. This is a completely different way to look at stocks. Young people dream of a battery company and their dreams. We see things we can not see,” but dreams can not last long without spreadsheets.

Doug Kass of my partner Seabreeze Partners said: “Tesla is shallow. It is tuned to sell emission credits. Tesla did not make a profit for 17 years.

For concept alchemy is trailblazer Amazon. Amazon is an online bookstore that originated in the 1990s and attracts Wall Street revenue.

As long as the concept continued to be understood and top-notch growth was strong, Bezos was able to build a behemoth-free retail business that was unbearable due to impatient things like profit or cash flow. It’s a snowy job that deserves PT Barnum, and it works. Amazon’s stock has risen, but positive earnings for the next 15 years are due to cloud storage.

But for every Amazon, there are temporary savings like JDS Uniphase and Pets.com. Theory: Everything is possible in the early days of driving strong emotions and extending years of high growth into the future.

Dreams are the reason why people play the lottery. As a result of the lottery, the states ruled them and made millions.

A rough bet

Tesla is an amazing success for investors and one day it could emerge as a long-term stock. But there are far, far less margins for mistakes when stocks become this expensive.

At this stage, Tesla relied more on the “ordinary fool” theory than on acceleration and more. This is unpredictable for investors like us.

Tesla can work if someone knowingly wants to roll the dice.

My advice for gamblers is in Las Vegas. At least if you lose in Vegas, you will be rewarded with a free cocktail.

For most people, money is hard to come by and it is difficult to save money. Disciplined investment builds wealth over time. Farr’s advice is to place bets on gamblers and focus on becoming a better investor. Happy Holidays!

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