Stock Market Chat

So are there many issues with Tesla cars? What are the typical problems?

 

Another maintenance issue EV owners don't have to deal with nearly as much, maybe even never, as compared to a gas cars is brake pads. Brake pads on EVs are on a whole another level because they are part of the power regeneration system so they are made of galvanized steel and last over 100k miles, lol. It's crazy.

 

Lately there is a lot of media attention on the likely rise of inflation. Do you guys think interest rates will go up?

 

Elon Musk is a bit like Dr Jekyll and Mr Hyde, totally bipolar. He will tweet whatever and then the opposite thing within a few days. He will say something about an investment opportunity and then say it is overpriced.. .

Elon Musk no longer world’s richest person as Tesla shares fall
Electric carmaker’s CEO falls behind Amazon founder Jeff Bezos after tweet saying bitcoin price ‘seems high’

https://www.theguardian.com/technol...-person-tesla-shares-jeff-bezos-bitcoin-price

 

Define a crash... It doesn't seem like the market is going to go down anytime soon with the fed pumping money into it. If the DOW goes up to $35k and then goes down to $28k (20%), did it really go down?

People not working, sitting around collecting money from the gov't and putting it in the market...

What is your opinion on the market going down, when and how much?

 

It's been a hard 2 weeks lol.

 

A crash is when the market as a whole goes into freefall. Proper crashes are very rare events, but they represent amazing opportunities to buy.

Nobody can reliably predict a crash, and anybody that says they can is full of shit. Analysts look at the state of the world's economy and they use various indicators to judge the markets, but this isn't an exact science; if it was, everyone would be a millionaire. A lot of the time, the markets do their own thing.

All I can say is that it's a good job I got back into investing with all the money we lost due to COVID-19.

I currently have 10 investments in my portfolio and have so far turned £2k into £20k in circa 8 months. That's not bad, but I could have done better. I sold some a tad too early which would have netted me an extra £7k, but you can't think that way in this game.

My goal is to generate enough money to buy another house. Whether I'll succeed or not remains to be seen.

 

What do you think about the price of Tesla? Is there any reason to justify it going up almost 20% just today? Does it make any sense at all?

 

Stimulus checks are coming. Whole market is up.

 

Tesla has been technically very overpriced for a long time, but those who tried to short it got stung. People are pricing in future performance and potential.

The markets don't make sense at the best of times. There will always be stocks/assets that are undervalued/overvalued where there's no logic to it. The trick is to buy very undervalued stock, and then wait it out throughout the ups and downs until you make substantially more money than you put in.

Some market caps make no sense at all, but that's the markets for you. If everything was worth exactly it's true value (which is often a number that people will have vastly different opinions about) then there would be few opportunities to make money.

 

Yes, today was a good day for many.

 

The FED keeps buying stocks. This market is rigged... Does anyone think the DOW will go down to $25k again or the NASDAQ will go down to $10k?

 

It's always been rigged in favour of the big institutions.

 

I don't own Tesla directly, but I own some ARKK, which has TSLA as its largest holding. I picked ARKK up since it gives me exposure to some of these more risky companies without having to individually bet on which ones I think will win. I also find Cathie Wood's way of thinking about investing to be very insightful (she's the CEO of Ark Invest). Part of their reasoning for buying companies with high price tags like Tesla is because disruption happens slowly at first, and then very quickly.

Think about the cell phone market 15 years ago, and then think about it 5 years later. Blackberry, Nokia, and Microsoft used to be huge players in that space. However, when the iPhone debuted it changed things. Adoption was slow at first - and the bigger players theoretically had time to catch up - but they didn't. The companies that moved quickly and innovated took over the market. By the time Microsoft had a smartphone, nobody wanted it.

Ark sees Tesla the same way. They expect that in a few years time Tesla will take over the market and most of the other automakers won't be able to catch up - and even if they could, Tesla has a better brand name and will possibly be able to make EV cars cheaper since they've had a lot more time to optimize their pipeline. Additionally they may be able to lead the way in new markets like self-driving (especially self driving taxis - thus eating Uber's lunch).

I'm not completely sold on this, but it makes their valuation make a little more sense. I could see them becoming the biggest player in the EV market, and I wouldn't be surprised if most new cars were EVs in 3-5 years.

 

What if that theoretical potential does not come true? What if the other carmakers have in store good projects for electric vehicles which they are hiding for the moment just to sell the old stuff for a few years more?

 

To me it's hard to come to terms with the idea that leading companies like Toyota or Volkswagen, who invest like 5 times more than Tesla, do not have a better project of an electric vehicle. It's quite shocking to be honest...

 

Tesla released its first EV in 2009, Toyota will be releasing their first one this year. Tesla is way ahead. Tesla also has been investing a lot in software, such as self driving. The other car makers haven't done this, and they'll need to partner with a company like google in order to do so. And when Google finally goes to market with their tech, they may want to make their own cars, similar to what Apple is planning.

Another pain point for companies like Toyota (at least in the US), is dealerships. These lead to bad car buying experiences. I don't know anyone who likes going to the dealer. You feel like you're getting swindled. When my older half brother bought his first car, he bragged to my dad about getting "ADM". I forget how the sales person phrased it to him, but my dad was quick to point out that ADM stands for "added dealer markup", and was something dealers were required to list when selling a car. Inexperienced car buyers are unlikely to know what an ADM sticker on a car means, and it's just nuts that people have to deal with this kind of crap when buying a car.

Tesla has managed to mostly side-step the dealership process [1], much to their chagrin, but it's still amazing how many states limit direct to consumer sales. Once more of these laws fall, online purchasing will become a lot more popular and the other companies will have their hands tied because they've signed deals with dealerships.

I feel like I'm sounding very pro-Tesla. I'm not a huge Tesla person, but I do hate dealerships and I love that Tesla has mostly found a way around them.

[1] https://en.wikipedia.org/wiki/Tesla_US_dealership_disputes

 

@patorjk, shorts have lost millions on Tesla (so far).

I read an article on the guy who predicted the 2008 financial crash predicting that Tesla will crash and for the investors to "enjoy it while it lasts".

The price compared to their P/E ratio is ridiculous!

It'll be interesting to see where it goes.

 

You mean Michael Burry? He's been wrong on a lot of his recent big predictions:

• Michael Burry Predicts an Imminent Stock Market Crash (2017)
• 'Big Short' investor Michael Burry predicted the housing crisis. Now he's calling passive investment a 'bubble.' (2018)
  
• ‘Big Short’ Michael Burry Has a Bearish Bet and Warns of a Selling Stampede (2020) - He said this right at the market bottom
  
• He also sold his 3% stake in GameStop in December 2020, before its recent meteoric rise. He still made money, but he completely misread the situation that was going on and missed out on incredible earnings.

I've noticed this pattern with a lot with famous stock market experts. They get 1 major prediction right, and then they milk it constantly, all while ignoring the times they were wrong.

That's not to say Tesla isn't over valued. Its P/E is super high, but then again, so was Amazon's for most of the last decade. It's only been recently that its P/E ratio has come down to more acceptable levels.

Also, I'll reiterate that I don't directly own any Tesla stock, I only have some through my investment in ARKK.

 

All stocks' P/E ratios are ridiculous... What's going to happen in August when the gov't stops giving all this free extra unemployment money and not one wants to work and they spent their money already.

 

Then Tesla's price would see a proper correction.

Its price is not based upon the current reality but rather an overwhelming belief in Elon Musk. Markets can behave very strangely, but it's an investors job to research everything and not just the financials. Look into the people who are running the company and see what their track records are like; what is the company's social presence like? You will see a correlation between the amount of Google searches and tweets a company has and its share price.

It comes back to that adage of buy the rumour, sell the news for good short term opportunities.

My philosophy is to invest in stocks/assets that have real growth potential, but I prefer riskier and more rewarding plays. I look for opportunities that have the potential to do at least a 5x, and hopefully a lot more.

 

I think that's unique of the US market. It is almost impossible to get those returns trading European stocks.

 

I don't know how car distribution works in the US, but in Europe for the price of a Tesla one can buy a very nice Mercedes or BMW, or a Lexus at the official dealer. It can be cheaper than a Tesla, depending on the model considered.

 

Interesting read about new "investment" trends:

From Crypto Art to Trading Cards, Investment Manias Abound

Each market frenzy seems crazier than the last. But all have the same roots.

 

I'm from the UK and invest in all markets.

The latest craze in Crypto is NFTs (non-fungible tokens). A piece of art just sold for $70m as an NFT. I don't see this as being a fad, though, as it has the potential to be a huge market disrupter. For example, the Kings of Leon's next album is going to be released as an NFT, and many more musicians have already released material this way. This could finally give equal opportunities to bands and artists so they no longer get taken advantage of by the streaming platforms like Spotify.

They are also being used for art and things like baseball and football cards. Video games are another huge market.

 

What's the real value of an NFT if it can be played for free (i.e. a song, or an album) or copied for free (digital art)?

 

I had a look at the webpage that article quoted, that stockx.com, and thought re-selling sneakers online cannot really give any money, except maybe for the odd model of which only 10 units were produced... I don't really see what the hype about reselling sneakers is about. I mean, where's the real value?

 

Guys, I'm so glad I heard here about Auris Medical. I got some shares for ~75 cents and it's exploding!

I'm also a big fan of crypto.

 

There are many aspects to this, first of all, NFTs bypass streaming and downloads, so all of the money goes to the artist instead of a small percentage (and in the case of streaming services, a minuscule fraction that is almost pointless). The bands can also give physical exclusive content, such as a rare numbered vinyl to go with the NFT that one purchases.

In the case of baseball cards, it's just a digitised representation of a real card. It's not my thing, personally, but the sale of an NFT piece of art for $70m, and the various things people buy in the gaming world demonstrate that people still put a collectable value on these things.

It's a developing market so it's still all speculative, but I can see potential in it as a store of value.

P.S. I can't access the article you posted as it's for subscribers only.

 

This is a free article:

Non-fungible tokens are revolutionising the art world – and art theft

There they question the legitimacy of internet users who turn copyrighted material into NFTs without any control, as there is no governing body that controls NFTs' production.

"MarbleCard isn’t the only NFT service that makes it trivial to “tokenise” other people’s content. Another, Tokenized Tweets, lets users turn any tweet into a tradable digital asset simply by sending a message on the social network, and artworks posted to the site have been a popular target for tokenisation. “Now people can sell your tweets all without your permission,” warned the artist RJ Palmer, whose own images were tokenised without his permission."

“There’s no oversight here, and seemingly no understanding of or respect for copyright. The unscrupulous way that it allows artists to be ripped off is maddening.”​