Is Tesla the sort of risk profile one wants to invest in at a premium?
$Tesla Motors(TSLA)$
On very rare occasions, true. $Amazon.com(AMZN)$ , certainly, probably $Meta Platforms, Inc.(META)$ (back when it was FB) and $Alphabet(GOOG)$ $Alphabet(GOOGL)$ . Certainly not $Apple(AAPL)$ or $NVIDIA Corp(NVDA)$ though.
Obviously VC gets to invest in those sorts of irrational hype companies, but those arent available to the rest of us. And even VCs are wrong 90% of the time.
So the question is: Is Tesla the 1 in 10 thats going to 100x from here? Or is it like the 9 in 10 that VCs lose money on?
And then we could do a little back of the envelope math: If Tesla 100xes from here, it would be worth 50 Trillion. The entire market cap of the NASDAQ (35 trillion) and NYSE (25 trillion) is barely more than that.
So it's a simple question: which would one be better off owning? The entire US stock market? Or Tesla?
The other relatively easy question when looking at a highly speculative investment: Does the management team have history of delivering on they hype? When I look at Musk over the last 20 years I see the following (from a business perspective, not from a personal preference)
Tesla Model 3 & Model Y-Massive positive (2010-2020)
Tesla-Semis, Self driving, Cybertruck, 50% annual growth... Massive negative (2021-2025)
Space X-win
Boring Company-massive negative
Twitter-total disaster (financially, lots of people like it better... I'm just looking at finances)
Other companies... jury is out.
Is that the sort of risk profile one wants to invest in at a premium?
But, hey, if the ride from $400 to $170 didn't hurt, the likely ride from $170 to $100 or lower won't hurt that much either.
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