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How can 1 US company be worth more than the top 350 UK companies?

12467…10

Comments

  • Middle_of_the_Road
    Middle_of_the_Road Posts: 1,228 Forumite
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    GeoffTF said:
    Middle_of_the_Road said:
    masonic said:
    Perhaps they are overvalued.
    No doubt some are. Would like to know how these two companies are valued 

    Tesla ~ $1 tn
    Ford ~ $40 bn
    The market believes that the net present value of Tesla's earnings will be much more than Ford's. If you believe that the market is wrong, you can buy Ford and short sell Tesla. You may, however, find that the market can remain irrational for longer than you can stay solvent (as Keynes famously said).
    Understood.
    It does seem rather irrational that one is going to have 25 times the earnings, whilst selling 75% fewer vehicles.
  • GeoffTF
    GeoffTF Posts: 2,315 Forumite
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    edited 5 June at 8:55PM
    Middle_of_the_Road said:
    GeoffTF said:
    Middle_of_the_Road said:
    masonic said:
    Perhaps they are overvalued.
    No doubt some are. Would like to know how these two companies are valued 

    Tesla ~ $1 tn
    Ford ~ $40 bn
    The market believes that the net present value of Tesla's earnings will be much more than Ford's. If you believe that the market is wrong, you can buy Ford and short sell Tesla. You may, however, find that the market can remain irrational for longer than you can stay solvent (as Keynes famously said).
    Understood.
    It does seem rather irrational that one is going to have 25 times the earnings, whilst selling 75% fewer vehicles.
    You would have made 14% with a short on Tesla today:
    Tesla is still showing a post election gain though.
  • Cus
    Cus Posts: 851 Forumite
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    masonic said:
    Perhaps they are overvalued.
    Perhaps the passive sheep don't care about value
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    100 Posts Name Dropper
    edited 3 September at 10:54AM
    IanManc said:
    [Deleted User] said:
    ........ but yeah it's pretty dead on the island nowadays ........
    The UK is the 6th largest economy in the world, and the 9th biggest manufacturer in the world.

    However, it has a sizeable portion of its population which glibly talks the UK down contrary to the evidence.
    The problem is the companies that make up the overwhelming bulk of our "large economy" are in no growth sectors. Banks, oil, mining etc. 

    Just for fun I removed banks, oil & gas, insurance, mining, and tobacco from the FTSE 350 and the market cap drops by 45%. So nearly half of the market cap is made up from those relic companies.

    I removed those same sectors from the S&P500 and the market cap drops by just 26%. 

    The contrast is undeniable. I don't really mind if the UK stock market is fuelled by high profit no growth companies, but I better be getting a 10% dividend yield as a result.
  • Hoenir
    Hoenir Posts: 7,742 Forumite
    1,000 Posts First Anniversary Name Dropper
    Cus said:
    masonic said:
    Perhaps they are overvalued.
    Perhaps the passive sheep don't care about value
    Sheep herd as it's safety in numbers. Mutual protection. 
  • Section62
    Section62 Posts: 10,302 Forumite
    10,000 Posts Fourth Anniversary Name Dropper
    Hoenir said:
    Cus said:
    masonic said:
    Perhaps they are overvalued.
    Perhaps the passive sheep don't care about value
    Sheep herd as it's safety in numbers. Mutual protection. 

    Some of them looking out for a baa-gain?
  • Middle_of_the_Road
    Middle_of_the_Road Posts: 1,228 Forumite
    1,000 Posts Second Anniversary Photogenic Name Dropper
    GeoffTF said:
    Middle_of_the_Road said:
    GeoffTF said:
    Middle_of_the_Road said:
    masonic said:
    Perhaps they are overvalued.
    No doubt some are. Would like to know how these two companies are valued 

    Tesla ~ $1 tn
    Ford ~ $40 bn
    The market believes that the net present value of Tesla's earnings will be much more than Ford's. If you believe that the market is wrong, you can buy Ford and short sell Tesla. You may, however, find that the market can remain irrational for longer than you can stay solvent (as Keynes famously said).
    Understood.
    It does seem rather irrational that one is going to have 25 times the earnings, whilst selling 75% fewer vehicles.
    You would have made 14% with a short on Tesla today:
    Tesla is still showing a post election gain though.
    Driven by the feud brewing between two of America's finest citizens, which likely could have been predicted, but I wouldn't gamble in this market, seems no more credible than bitcoin.
  • Hoenir
    Hoenir Posts: 7,742 Forumite
    1,000 Posts First Anniversary Name Dropper
    edited 5 June at 9:56PM
    Middle_of_the_Road said:
    GeoffTF said:
    Middle_of_the_Road said:
    GeoffTF said:
    Middle_of_the_Road said:
    masonic said:
    Perhaps they are overvalued.
    No doubt some are. Would like to know how these two companies are valued 

    Tesla ~ $1 tn
    Ford ~ $40 bn
    The market believes that the net present value of Tesla's earnings will be much more than Ford's. If you believe that the market is wrong, you can buy Ford and short sell Tesla. You may, however, find that the market can remain irrational for longer than you can stay solvent (as Keynes famously said).
    Understood.
    It does seem rather irrational that one is going to have 25 times the earnings, whilst selling 75% fewer vehicles.
    You would have made 14% with a short on Tesla today:
    Tesla is still showing a post election gain though.
    Driven by the feud brewing between two of America's finest citizens, which likely could have been predicted, but I wouldn't gamble in this market, seems no more credible than bitcoin.
    Trump has stabbed Musk in the back. The "Big Beautifull Bill" is destined to remove the state subsidy from Tesla cars. Another nail in Musk's business plan. That $250 million (£187m) spent supporting Trump's election campaign is dead money. 
  • Middle_of_the_Road
    Middle_of_the_Road Posts: 1,228 Forumite
    1,000 Posts Second Anniversary Photogenic Name Dropper
    Hoenir said:
    Middle_of_the_Road said:
    GeoffTF said:
    Middle_of_the_Road said:
    GeoffTF said:
    Middle_of_the_Road said:
    masonic said:
    Perhaps they are overvalued.
    No doubt some are. Would like to know how these two companies are valued 

    Tesla ~ $1 tn
    Ford ~ $40 bn
    The market believes that the net present value of Tesla's earnings will be much more than Ford's. If you believe that the market is wrong, you can buy Ford and short sell Tesla. You may, however, find that the market can remain irrational for longer than you can stay solvent (as Keynes famously said).
    Understood.
    It does seem rather irrational that one is going to have 25 times the earnings, whilst selling 75% fewer vehicles.
    You would have made 14% with a short on Tesla today:
    Tesla is still showing a post election gain though.
    Driven by the feud brewing between two of America's finest citizens, which likely could have been predicted, but I wouldn't gamble in this market, seems no more credible than bitcoin.
    Trump has stabbed Musk in the back. The "Big Beautifull Bill" is destined to remove the state subsidy from Tesla cars. Another nail in Musk's business plan. That $250 million (£187m) spent supporting Trump's election campaign is dead money.
    No doubt. I probably shouldn't comment further, at risk of straying into political territory.
  • wmb194
    wmb194 Posts: 5,391 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    edited 3 September at 10:54AM
    [Deleted User] said:
    IanManc said:
    [Deleted User] said:
    ........ but yeah it's pretty dead on the island nowadays ........
    The UK is the 6th largest economy in the world, and the 9th biggest manufacturer in the world.

    However, it has a sizeable portion of its population which glibly talks the UK down contrary to the evidence.
    The problem is the companies that make up the overwhelming bulk of our "large economy" are in no growth sectors. Banks, oil, mining etc. 

    Just for fun I removed banks, oil & gas, insurance, mining, and tobacco from the FTSE 350 and the market cap drops by 45%. So nearly half of the market cap is made up from those relic companies.

    I removed those same sectors from the S&P500 and the market cap drops by just 26%. 

    The contrast is undeniable. I don't really mind if the UK stock market is fuelled by high profit no growth companies, but I better be getting a 10% dividend yield as a result.
    You cannot think of any companies operating in Britain and for which people work that aren't listed on the LSE?
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