Out of curiosity, what is your fair share value for Tesla under the current interest rates? I understand that we are about at half from AH but wasn't that high during kind of a bubble market? Are you expecting for Tesla to break $300 this year? Maybe I have become too bearish after a horrible 2022 and I am trying to reassess my expectations. Thanks
These are good questions and I would like better answers for you than I actually have.
The first part of my answer is that, despite knowing how incredibly important they are, I ignore the impact of interest rates on the share price. It would be most accurate to say that I do consider changes in interest rates and their impact on the short term price of the company. But for a "fair" market valuation - I consider this a long term investment question, and for that - I ignore interest rates. That's not necessarily a good choice
For my long term view of the company I also do not have a financial spreadsheet or analysis of income / units / profitability / .. I think that the best way to think of me is as a story investor. I invest in the big picture, understand enough finance and accounting to follow company financials and confirm or deny that the company is on track financially, and don't sweat the rest of it.
The story I see right now is that the company spiked to $400 a year ago (and a bit). I think the share price got well ahead of the company at that point. However it didn't get 3x ahead, or now at $210, it wasn't 2x over priced a year ago. Yes interest rates are up, but I tend to believe that for a long term buy and hold, growing as fast as Tesla is, as profitably as Tesla is, whether interest rates are 0, 5, or 10% isn't all that meaningful. It actually is, but as a long term buy and hold investor I mostly discount it. Over a 5+ year time horizon, whether the interest rates this year are 4%, 5%, or 8% I think will matter very little.
NOT-ADVICE
Yes I expect TSLA to go over $300 this year. That would be $900 pre-split, and that doesn't sound unreasonable to me. If we were to live between 150 and 300 the rest of the year, that wouldn't surprise me. If we blew the top off and ran over $400 on our way to something much higher, that wouldn't be a great shock to me.
Something like 250-350?
I still consider every share price <250 to be low. That doesn't mean we can't drop below 250 - only that we won't/can't go a lot below (say 200 at the lowest end that can be sustained). Therefore yes, I still consider 210 to be too cheap.
Real point for the moment - I still consider 210 to be too cheap to hold, but we're clearly a lot closer to a fair value than when we were $110. It's reasonably accurate to say that I'm not ready to sell cc yet because the strikes I would be selling aren't strikes I am ready to take assignment on. But we're getting close.
