You're concerned with a 23% YTD return on the stock and a 600% return over 5 years? The market has a way of signaling if a company is totally screwed up. Looks like it isn't.
Well the market can be terribly wrong on many companies in the long run, both undervaluing great companies and overvaluing terrible companies. Tesla's vision is for the next 20 years, not the last 5.
Historical performance is also not an indicator of future performance. Everyday I'm holding onto the shares is the same as if I made the decision to buy that many shares on that day. If anything the fantastic return would encourage long term investors so far to partially cash out and diversify their risk a bit.
> Everyday I'm holding onto the shares is the same as if I made the decision to buy that many shares on that day
This is a great way to think about holding investments. I remember using this argument to try and convince a family member that they should sell what I considered to be a bad investment. I phrased it as 'If you were forced to sell your shares right now would you use the money from the sale to immediately buy back your shares?'. He responded that no, he wouldn't. Obviously this ignores brokerage fees, but it is a useful thought experiment nonetheless.
> Everyday I'm holding onto the shares is the same as if I made the decision to buy that many shares on that day
While I'm not a banker, I find with this method looking at investments highly disagreeable. The price of the stock at the time of purchase is the projected future profits discounted to present day. In other words, it is the fundamental value of the firm, which is invariant of its day-to-day fluctuations.
If you have to be watching for the daily upticks, it's a sign the company is either incompetent or is operating in a highly unfavorable environment.
I don't see how any good can be gained from envisaging a purchase price other than your lock-in price.
I suppose "the market" was collectively looking the other way for Bear Stearns in January 2007, when it closed on a record high? What was the market signaling about Enron in September 2000, little over a year before it collapsed?
Share prices can be fantastic while a company is horribly, even comically mismanaged. They soar right up until they don't.
That return can only be realized if OP sells. It sounds like OP's intent was to buy shares in a long-term business/vision, not in a stock.
In the long term, markets are a weighing machine, but in the short term, they are a popularity contest.
In August 1998, YHOO traded under $10/share. In December 1999, YHOO traded at > $100/share, a > 1000% return over 16 months. From February 2001 to February 2003, YHOO traded under $10/share. Markets are fickle.
That is because Yahoo got overtaken by Google's superior ad platform and search. Tesla has no obvious viable competitors. It is a premium product that caters to a specific demographic, much like the iPhone in 2007.
The market isn't an oracle, and a stock doing well is no guarantee that a company is moving in the right direction. The sentiment is that they're doing well, but only time can prove that.
Cookingboy|9 years ago
Historical performance is also not an indicator of future performance. Everyday I'm holding onto the shares is the same as if I made the decision to buy that many shares on that day. If anything the fantastic return would encourage long term investors so far to partially cash out and diversify their risk a bit.
ganonm|9 years ago
This is a great way to think about holding investments. I remember using this argument to try and convince a family member that they should sell what I considered to be a bad investment. I phrased it as 'If you were forced to sell your shares right now would you use the money from the sale to immediately buy back your shares?'. He responded that no, he wouldn't. Obviously this ignores brokerage fees, but it is a useful thought experiment nonetheless.
danm07|9 years ago
While I'm not a banker, I find with this method looking at investments highly disagreeable. The price of the stock at the time of purchase is the projected future profits discounted to present day. In other words, it is the fundamental value of the firm, which is invariant of its day-to-day fluctuations.
If you have to be watching for the daily upticks, it's a sign the company is either incompetent or is operating in a highly unfavorable environment.
I don't see how any good can be gained from envisaging a purchase price other than your lock-in price.
teslacar|9 years ago
dsacco|9 years ago
Share prices can be fantastic while a company is horribly, even comically mismanaged. They soar right up until they don't.
ISL|9 years ago
In the long term, markets are a weighing machine, but in the short term, they are a popularity contest.
In August 1998, YHOO traded under $10/share. In December 1999, YHOO traded at > $100/share, a > 1000% return over 16 months. From February 2001 to February 2003, YHOO traded under $10/share. Markets are fickle.
teslacar|9 years ago
robszumski|9 years ago
While the 600% is impressive, the year to date performance matches the overall market.
Gotta hit those Model 3 dates to maintain the confidence.
ojbrien|9 years ago
MSCI ACWI Autos and Components was at 3.44% YTD at the end of Feburary while MSCI ACWI was at 5.37%. The S&P 500 is at about 7% YTD return.
Tesla's YTD return more than matches the overall market
https://www.msci.com/documents/10199/f87aad4f-6f38-4878-a149...
CaveTech|9 years ago
kelvin0|9 years ago
unknown|9 years ago
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twblalock|9 years ago
The markets can't predict the future. Investors' expectations about the future are priced into the stock, but those expectations are often wrong.
ebbv|9 years ago
RayVR|9 years ago
unknown|9 years ago
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tma-1|9 years ago
shriphani|9 years ago
unknown|9 years ago
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elastic_church|9 years ago