Why you should invest in Tesla

Nody

lucky john wrote: »

One big difference between Tesla and companies of the dotcom boom is that Tesla actually sell a product you can physically see and touch. Its not even a new product just a new spin on a product. There is no mystery here as regards the numbers. there is a production cost, a sale price and a margin. So this is no dotcom type company, but a very traditional business. Musk though has just engineered a very new USP for the motor industry. He is selling an iphone you can drive and I suspect that will drive itself in the near future. You may scoff at the Musk effect but it is a legitimate driver of price.

Boo.com had a legitimate website you could buy from; that did not stop it from being a billion dollar sink hole. It was also very much ahead of it's peers on the market (it was the selling point after all with Musk) and it failed just as easily as well. All you've stated as an argument beyond that is "he's a genius so that motivates everything else" which was exactly a dot.com style argument as well which is promise of future visions of grandiose without having anything to actually back them up of being realized.

The numbers under the hood are not that bad. they are been influenced by the huge amount spent on R&D and setup costs. Both these things will bear fruit from next year on. Now that Model X is up and running the concentration will be on the Model 3 ( Was supposed to be the Model E (SEX) but Ford registered the E first. musk is looking at the next car been the Model Y). Modle 3 will be the first attempt at producing an all EC that is affordable to the middle class. It will be turning Tesla into a mainstream auto manufacturer. That is scaring the crap out of the big guys and hence a lot of anti Tesla headlines.

Sorry but a 50k car is not the definition of affordable; even 30k would be pushing it and that's assuming there would be no competition on the market. Remember the car can ONLY be sold in a very limited market due to the lack of plug in recharging network and that's not exactly going to explode because of one specialized car company; if anything the best bet he has is to sell his technology for other companies to use rather then trying to corner the market himself (but I doubt he'll do that; to much ego).

My hesitation is nothing to do with fear this is in any way a bubble stock. I don't for a second think it is. I just thing Tesla over promised on the time line (not for the first time) and will struggle to meet expectations. The risk V reward I see is that they do pull off 50000 plus units and a decent entry price is missed.
When i do invest I will post and in 5 years time we will see where we are.

But by the definition you do believe it's overvalued and hence not worth the current money (compared to the alternatives) or you'd invest in it. Your reason is that you think he's not going to get the sales he claims; my claim is he's not going to get the sales/promises he's targeting and hence his share is overvalued and the argument for the current price is magical pixy dust (i.e. "he's a genius and hence this will sky rocket in a couple of years just you wait and see"). The only difference being I see a self fulfilling prophecy going on with everyone raving about Musk for years now and motivating how the future will be saved because of his electrical cars etc. to convince themselves and the people around them it's the right choice; numbers disagree however and chances are they'll end up a niche company at best...

lucky john

"Sorry but a 50k car is not the definition of affordable; even 30k would be pushing it and that's assuming there would be no competition on the market. Remember the car can ONLY be sold in a very limited market due to the lack of plug in recharging network and that's not exactly going to explode because of one specialized car company; if anything the best bet he has is to sell his technology for other companies to use rather then trying to corner the market himself (but I doubt he'll do that; to much ego). "


unfortunately you know little or nothing about Tesla or Musk If you did you would know Tesla are committed to and have long began rolling out charging stations all over the US and further afield. You would also know that Tesla makes all its technology open source and has committed publicly not to defend any patents it owns. Also Musk will always be the owner of the FIRST private company to build, send and return a rocket to the ISS.

I want to gain the most from any investment I can. It is prudent to buy as low as possible. I see nothing wrong with that.

Sabre Man

The reason the cars are only sold in a limited number of markets is production constraints. The charging network is constantly being expanded.

Tesla Model S is already outselling high-end BMWs and Audis in Europe, and is not too far behind Mercedes
http://www.bmwblog.com/2015/10/19/tesla-model-s-passes-bmw-audi-getting-close-to-mercedes-in-europe/

I would not buy any TSLA shares right now though as I think the price will fall further on weak production numbers. Tesla was also slated by Consumer Reports over quality issues. My impression is that quality is improving but I still have some concerns over drive units and batteries in the long run.

RobertKK

Elon Musk is the successor to Steve Jobs, the same vision and innovation.

I wouldn't bet against him. We all wish we had bought the shares when at $30 a share.

beertons

How much are they now?

RobertKK

beertons wrote: »

How much are they now?

Right now $211 a share, their all time high is $286.

alb

RobertKK wrote: »

Elon Musk is the successor to Steve Jobs, the same vision and innovation.

Is that assumption already priced in? It seems like it is.

RobertKK

alb wrote: »

Is that assumption already priced in? It seems like it is.

He is a CEO that comes with a lot of trust due to his record. So yes, you are right there is an Elon Musk factor priced into the shares.
But ultimately it is a numbers game.

Sabre Man

The earnings report is out tonight after market close.

RobertKK

Good guidance has Tesla up around 8% after hours.

Revenue a slight miss, adjusted loss higher than estimates.

lucky john

they will hit the important number of 50000 plus units. they have also brought forward the launch of the model 3 to mid 2016. a few other positives in there as well regarding the battery business. Should have gone with instinct on this one and just jumped in on the weakness. Sometimes too much research and thinking about it is as bad as too little.

Blacktie.

lucky john wrote:

they will hit the important number of 50000 plus units. they have also brought forward the launch of the model 3 to mid 2016. a few other positives in there as well regarding the battery business. Should have gone with instinct on this one and just jumped in on the weakness. Sometimes too much research and thinking about it is as bad as too little.

It's called hindsight and will never be wrong.

lucky john

Took the plunge today at $230 per share. Not a big investment, 14 shares. I hope my foresight proves as good as my hindsight. This is a long term investment. I expect to be still in here 5 years from now.

Sabre Man

lucky john wrote: »

Took the plunge today at $230 per share. Not a big investment, 14 shares. I hope my foresight proves as good as my hindsight. This is a long term investment. I expect to be still in here 5 years from now.

Best of luck. I'm cheering them on from the sidelines as I like their products.

If I decide to invest in Tesla again I will probably be utilizing a buy low sell high shortish term strategy using technical indicators. It's a very volatile stock for an exiting future.

lucky john

Sabre Man wrote: »

Best of luck. I'm cheering them on from the sidelines as I like their products.

If I decide to invest in Tesla again I will probably be utilizing a buy low sell high shortish term strategy using technical indicators. It's a very volatile stock for an exiting future.

I like the products and musk. Its a tech company with a product I can actually understand. Its a simple business model. Just build and sell cars.

IF they deliver the promised number of cars by year end then all should be fine. If they don't then you will definitely get your chance. Keep an eye out for the "will they, won't they" next January.

Thargor

Nody wrote: »

Honestly Tesla is a big bubble company at this stage and reminds me of Fingerprint companies (they have gone up like 1200% this year) and the fact the current stock exchange is already very highly valued from historical values (due to zero interest by Fed etc.). Look at any economical data you want and try to justify the current valuation without some future "everyone will drive Tesla" math and tell me what you come back and don't fall back on the justification that he's a genius and therefor it's ok. It reminds me of the 2000 IT boom with the companies having insane valuations "because they have to be first and then they will make gazillions" which became a reinforcing mantra until the crash with the individuals who as always were the last on to the train taking the hit. Finger print companies and Tesla just happens to be the latest version of it and while I do hope, and think, long term it may work out the valuations today vs. the alternatives simply makes me sit at the sidelines. Yes, I may miss a share gain but investments is about risk vs. potential reward and the risk in Tesla are way higher then the potential reward at this stage and will be for quite a while by the looks of it.

Im out since 230-240 for all the reasons listed above, I was just starting to dread the day I logged in to see TSLA 30-40% down on some report and then returning to a more realistic valuation, still think it could happen tbh, not only do they not have unique patents they actively release anything interesting they do have for free and they let other cars use their supercharger network, there is literally nothing stopping Ford and GM and the rest from letting Musk do the groundwork and then hopping onboard with equally impressive products. Any battery tech or anything they come up with will likewise be pumped out cheaper in Asia by companies you never heard of. Tesla are not the invincible brand that Apple was under Jobs.

Sabre Man

Thargor wrote: »

not only do they not have unique patents they actively release anything interesting they do have for free and they let other cars use their supercharger network, there is literally nothing stopping Ford and GM and the rest from letting Musk do the groundwork and then hopping onboard with equally impressive products. Any battery tech or anything they come up with will likewise be pumped out cheaper in Asia by companies you never heard of. Tesla are not the invincible brand that Apple was under Jobs.

Other cars can't use Tesla superchargers. Once the gigafactory is ready it will take a lot for anyone to compete with battery prices, Asians included.

Tesla is a cool brand with prices to match. Model 3 will to to cars what the iPhone did to Nokia, Blackberry and the others.

Thargor

They can charge there just not supercharge cant they? iPhone (copied immediately by Android which is now 80-90% of the market) wont happen with electric cars after Teslas initial success. Ford, GM, BMW, VW etc are not going to slink off and die, anything with mainstream success instead of niche luxury will be copied X infinity.

Sabre Man

Thargor wrote: »

They can charge there just not supercharge cant they? iPhone (copied immediately by Android which is now 80-90% of the market) wont happen with electric cars after Teslas initial success. Ford, GM, BMW, VW etc are not going to slink off and die, anything with mainstream success instead of niche luxury will be copied X infinity.

No, early Model S60 owners had to pay $2500 to get supercharger access. Currently all new Teslas can supercharge, but it may be an option on Model 3 (my speculation) to keep the base price down.