“When an Adult is in the house, the she-goat is not left to suffer the pains of parturition on its tether” An Ancient African Proverb
Billionaire investor Chamath Palihapitiya told CNBC on Thursday that Tesla’s stock could be worth three times its current valuation, and his advice for investors is simple “don’t sell a share“.
I believe that Tesla should be celebrated for leading the way in the Electric Vehicle space, and somewhat in the AV and Battery Tech space. It’s normal for Tesla to be rewarded with some degree of overvaluation for its accomplishments but not to infinity.
Tesla’s P/E ratio is currently over 1,600. What innovation or management team should reasonably justify putting down $1600 as investment for $1 in earnings?
When is Tesla’s earnings expected to justify its current valuation? 5 years or 10 years from now, at a point in time where competitors are expected to have caught up with Tesla.
Apple’s innovative iPhone helped the company’s rise to the top of the smartphone market-share board, but it didn’t take forever for competitors to catch up and displace Apple from the top spot. Heck, Apple doesn’t not even hold the second spot on the top of the smartphone market-share board today.
So I ask the adults in the house that are allowing the she-goat to suffer the pains of parturition, what evidence is there to suggest that Tesla is going to be king of the EV kingdom indefinitely to justify such a valuation as it has today?
Two days ago, it was reported that Volkswagen has overtaken Tesla in EV sales in Norway, with the report also revealing that EV sales hit record 54% of sales in Norway.
With the likes of Nio rising in China and the existing tension between US and China, do these adults think that the Communist Government of China will let Tesla’s EVs reign supreme in the world largest Auto market?
Tesla is not the only stock listed in the stock market, as a matter of fact it wasn’t the stock that brought in the highest ROI last year. I might not be a Billionaire investor like Palihapitiya, but I won’t sit back and allow my readers be that fly that wouldn’t listen to reason and follow the corpse to the grave.
Henry John is a Stock Portfolio Manager that focuses on companies developing cutting-edge technologies.
Keeping track of cutting-edge techs, companies and stocks is what I do almost everyday. And I love it. Whether it’s artificial intelligence, 5g, or autonomous vehicles; I’m all in.
I’m a self-made millionaire who made most of his money investing in technology companies while working in finance.
Yes! I owe it all to tech and finance.