Becoming more bearish

BananaRepublic

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

There is a bubble in US tech stocks, but bubbles can go on for years until something pops them eg an oil crisis. 

Tesla is foremost a car manufacturer not a tech company. More money that piles into passive funds the higher the price will be driven.  

They are driven by tech to give them a competitive advantage, novel motor tech, novel battery tech, self driving tech etc. If they were just another Toyota or VW, they would not be the darling of the stock market.

Tech has it's own issues as the recall in the US of 158,000 vehicles due to touchscreen failures highlights. The more complex you make a vehicle the more there is to go wrong and costly to maintain. 

Index weighted funds have to buy the stock irrespective of their actual view on it's price as fund managers. 

So you think the only driver (no pun intended) for the Tesla price is index funds?

Recently, without a doubt currently yes. The inclusion of Tesla into the S&P 500 was well flagged months ago.  Hedge funds etc would have been bought up huge quantities of stock knowing that the large US management groups running passive funds had no option but to buy at any price. Been a play in the UK for many years by active fund managers to identify growing stocks in the FTSE 250. On the basis that one day they'll be elevated into the FTSE100. Though most of the price increase happens while in the FTSE250. As the weighting ascribed to the stocks puts them down at the bottom of the index there's relatively little further uplift. As not immediately into the top 20. Which is the issue with the manner of Tesla's inclusion.  

Okay, but that's not driven by index funds. You are talking about the actions of hedge fund managers etc.

Takes 2 parties to trade. 

Come on now, that does not explain gains of over 500%, and an absurd price. 

Thrugelmir

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

There is a bubble in US tech stocks, but bubbles can go on for years until something pops them eg an oil crisis. 

Tesla is foremost a car manufacturer not a tech company. More money that piles into passive funds the higher the price will be driven.  

They are driven by tech to give them a competitive advantage, novel motor tech, novel battery tech, self driving tech etc. If they were just another Toyota or VW, they would not be the darling of the stock market.

Tech has it's own issues as the recall in the US of 158,000 vehicles due to touchscreen failures highlights. The more complex you make a vehicle the more there is to go wrong and costly to maintain. 

Index weighted funds have to buy the stock irrespective of their actual view on it's price as fund managers. 

So you think the only driver (no pun intended) for the Tesla price is index funds?

Recently, without a doubt currently yes. The inclusion of Tesla into the S&P 500 was well flagged months ago.  Hedge funds etc would have been bought up huge quantities of stock knowing that the large US management groups running passive funds had no option but to buy at any price. Been a play in the UK for many years by active fund managers to identify growing stocks in the FTSE 250. On the basis that one day they'll be elevated into the FTSE100. Though most of the price increase happens while in the FTSE250. As the weighting ascribed to the stocks puts them down at the bottom of the index there's relatively little further uplift. As not immediately into the top 20. Which is the issue with the manner of Tesla's inclusion.  

Okay, but that's not driven by index funds. You are talking about the actions of hedge fund managers etc.

Takes 2 parties to trade. 

Come on now, that does not explain gains of over 500%, and an absurd price. 

Teslas inclusion in the S&P 500 was being discussed last July.  Didn't meet the full criteria for inclusion in September. As it's not just decided on price alone. (Additions and relegations from the index being made on a quarterly basis). 

On the 13th July 2020, 50,000 Robinhood investors in the USA added Tesla to their accounts. This was on top of 408,000 who were already holding the stock.  Guess they had become bored with Hertz by then. 

NedS

Read somewhere the other day, Tesla is now worth $1.6Million for every car produced in the last year ($802B valuation and 500,000 cars produced). That's a lot of forward earnings priced in.

BananaRepublic

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

Thrugelmir said:

BananaRepublic said:

There is a bubble in US tech stocks, but bubbles can go on for years until something pops them eg an oil crisis. 

Tesla is foremost a car manufacturer not a tech company. More money that piles into passive funds the higher the price will be driven.  

They are driven by tech to give them a competitive advantage, novel motor tech, novel battery tech, self driving tech etc. If they were just another Toyota or VW, they would not be the darling of the stock market.

Tech has it's own issues as the recall in the US of 158,000 vehicles due to touchscreen failures highlights. The more complex you make a vehicle the more there is to go wrong and costly to maintain. 

Index weighted funds have to buy the stock irrespective of their actual view on it's price as fund managers. 

So you think the only driver (no pun intended) for the Tesla price is index funds?

Recently, without a doubt currently yes. The inclusion of Tesla into the S&P 500 was well flagged months ago.  Hedge funds etc would have been bought up huge quantities of stock knowing that the large US management groups running passive funds had no option but to buy at any price. Been a play in the UK for many years by active fund managers to identify growing stocks in the FTSE 250. On the basis that one day they'll be elevated into the FTSE100. Though most of the price increase happens while in the FTSE250. As the weighting ascribed to the stocks puts them down at the bottom of the index there's relatively little further uplift. As not immediately into the top 20. Which is the issue with the manner of Tesla's inclusion.  

Okay, but that's not driven by index funds. You are talking about the actions of hedge fund managers etc.

Takes 2 parties to trade. 

Come on now, that does not explain gains of over 500%, and an absurd price. 

Teslas inclusion in the S&P 500 was being discussed last July.  Didn't meet the full criteria for inclusion in September. As it's not just decided on price alone. (Additions and relegations from the index being made on a quarterly basis). 

On the 13th July 2020, 50,000 Robinhood investors in the USA added Tesla to their accounts. This was on top of 408,000 who were already holding the stock.  Guess they had become bored with Hertz by then. 

It’s about double the price in 2017/18, so no entering the S&P doesn’t explain the company being more valuable than the next six most valuable car companies combined. But you mentioned Robinhood investors and one feature of Tesla is massive hype. I’m not questioning Musk’s achievements, but this is being driven by sentiment. 

Ciprico

NedS said:

Read somewhere the other day, Tesla is now worth $1.6Million for every car produced in the last year ($802B valuation and 500,000 cars produced). That's a lot of forward earnings priced in.

...and the same article quoted about 10k per car for GM. 

BananaRepublic

Here’s a thought.

Due to Coroni, a lot of people are sitting at home, unable to take a nice summer holiday, and a nice winter holiday, unable to go out for a meal with family and so on. The virus has hit lower paid workers worst, restaurant and cafe staff, ice rink and cinema staff, hotel staff etc. The tech company I worked for has done well due to increased demand for touchscreens. Spending has gone down, and many middle class people are investing saved money in stocks.

Come summer and furloughing will go, lives will resume, many companies will succomb having staggered on, others will boom fulfilling pent up orders and buying bankrupt competitors. People in the US and abroad will stop investing in the US markets. They might even take profits to pay for a nice holiday, or a nice new car to explore the newly opened world. 

Does this mean a US market crash? A market dip? A slow down? Or is it insignificant?

Username999

NedS said:

Read somewhere the other day, Tesla is now worth $1.6Million for every car produced in the last year ($802B valuation and 500,000 cars produced). That's a lot of forward earnings priced in.

The article ignores: Tesla Semi/Cybertruck/$25K car Solar Full Self Driving ($10K a download) 3 Billion miles data Robotaxi Regulatory credits New battery technology Charging infrastructure Tequila and some nice Shorts too.

Thrugelmir

BananaRepublic said:

Here’s a thought.

Due to Coroni, a lot of people are sitting at home, unable to take a nice summer holiday, and a nice winter holiday, unable to go out for a meal with family and so on. The virus has hit lower paid workers worst, restaurant and cafe staff, ice rink and cinema staff, hotel staff etc. The tech company I worked for has done well due to increased demand for touchscreens. Spending has gone down, and many middle class people are investing saved money in stocks.

Come summer and furloughing will go, lives will resume, many companies will succomb having staggered on, others will boom fulfilling pent up orders and buying bankrupt competitors. People in the US and abroad will stop investing in the US markets. They might even take profits to pay for a nice holiday, or a nice new car to explore the newly opened world. 

Does this mean a US market crash? A market dip? A slow down? Or is it insignificant?

The bookies are closed and every US taxpayer people has been mailed cheques whether they need the money or not. . 

Thrugelmir

Username999 said:

NedS said:

Read somewhere the other day, Tesla is now worth $1.6Million for every car produced in the last year ($802B valuation and 500,000 cars produced). That's a lot of forward earnings priced in.

The article ignores: Tesla Semi/Cybertruck/$25K car Solar Full Self Driving ($10K a download) 3 Billion miles data Robotaxi Regulatory credits New battery technology Charging infrastructure Tequila and some nice Shorts too.

Nor that Tesla has been knocked off the top EV selling spot in both Norway and the Netherlands. Competition has arrived. No longer the only story in town. Americans being an insular race, most likely still believe that Tesla is heading for global dominance. 

Delays to Berlin Gigafactory construction are unhelpfull to the cause. 

Voyager2002

BananaRepublic said:

There is certainly a minority, I have no idea how large, of self hating people on the soft left. I've spoken to countless remainers and a common theme is distaste for our politicians, and great respect for EU politicians. Another theme is a distaste for the British working classes. Several people told me with a straight face that people below a certain intelligence level should not be allowed to vote. Many have said you should not allow the 'people' to vote, only 'educated' politicians who know what they are doing should be allowed to vote. And often these people express massive guilt about the 'crimes' of the British Empire, but ignore the fact that countless empires, including non European ones, have committed worse crimes. I don't assume most remain voters hold these views, but they are very common among the vocal opinion formers, including those interviewed on the radio.

There is no element of self-hatred in anyone who compares Boris Johnson unfavourably with Angela Merkel. It would be a perverse kind of patriotism that obliged one to deny that the former was a scoundrel and liar simply because he is our scoundrel and liar.

Brexit is baffling for anyone who believes in democracy. Perhaps the lesson is that questions whose analysis requires a certain amount of technical knowledge should not be put to a popular vote: we do after all have a system of representative democracy. Politicians are paid (handsomely) to put in the time required to get to grips with such issues: ordinary people with full-time jobs and family commitments are not in a position to do this.