Reply to post: Tesla Valuation

It's IPO week and one of Wall Street's own is raising the spectre of a stock market crash

Anonymous Coward
Anonymous Coward

Tesla Valuation

For a company that has only just started to turn a profit their valuatiion is insane.

There is no way that on their earnings to date, their balance sheet and the ongoing trade war with China that they are the most valuable car maker in the world.

I'm not saying that in future they won't be but in the here and now? really?

This highlights an age old problem with Wall St. As long as profits are rolling in the gamblers win. But there comes a time when the forcasts made by analyists are simplty pie in the sky.

There was a case back in the 1970's where a US Insurance company kept on producing record profits quarter after quarter after quarter. Pretty soon, the alalyists were predicting that their customer base was going to be greater than the entire population of North America (inc Canada and Mexico). It was there for all to see but people were blinded by the light of prospective profits. Then the house of cards came tumbling down and many people were ruined.

I think that the OP was saying that it is a good time to look at the real long term viability of your investments and how would those companies fare with a market crash similar to 1929. If you are over exposed to any one sector then it is time to do something about it. Putting money into companies that are in Elon's own words 'like a hundred startups' (aka Tesla) might not be the best place to put all your money. Having some under the mattress might be a good idea.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2022