Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[EVDRVN]

Picked up $25 shares at $899 since you guys bottom feeders are starting bum me out with the recent rhetoric here ... what no Santa Claus Rally ? ... i am now buying beyond my target shares .. as these deals wont last long

My Target fell on the ground, same one Tesla uses to price their cars. Velcro darts were never a great idea after all.

 

[henchman24]

Cathie had a good point recently regarding valuations and bubbles. More or less pointed out that 1999 was a bubble because nobody thought we were in a bubble. Now, many people are calling the bubble.

1999 was well before my investing days, but I think that sounds about right.

The dot com bubble is well before my time, so I can't really comment on that. The logic makes sense, but I was in my teens... I was more concerned about the next party. I feel like for the last 8 years people have been calling for a bubble to burst when fundamentally it doesn't look like a bubble. Looking back the P/E is a little high, but looking forward the earnings growth is very strong and companies like Apple are basically money printing machines. Forward P/E is still a little high above 20, but not absurd. IIRC the 5 year average is about 19. What I'd say is really happening more than anything is the biggest companies are getting larger and larger shares of the economy and margins are tending to increase. Leading to extreme mega cap growth, while leaving others behind. Without FAANG, SP500 looks rather weak.

To me a sign that we are not in a similar bubble is COIN. Talk about a company with extreme potential, fantastic P/E, fantastic growth... but a rather lousy valuation. Their whole company is blockchain based and the market doesn't understand it and is naturally skeptical... despite some underlying pieces that could signal the next megacap.

 

[Nocturnal]

People were screaming bubble relentlessly. Everyone thought we were in a bubble in 1999. From 1996 with Greenspan and irrational exuberance.

FRB: Speech, Greenspan -- Central banking in a democratic society -- December 5, 1996

Love Cathie, but what is she talking about?

Perhaps I'm mixing up quotes. Let me look for the video.

Edit, poor summary by me perhaps.

Innovation Stocks Are Not in A Bubble: They Are in Deep Value Territory

ARK takes advantage of volatility during corrections and concentrate our portfolios toward our highest conviction innovation stocks.

ark-invest.com

In our view, the wall of worry built on the back of high multiple stocks bodes well for equities in the innovation space. The strongest bull markets do climb a wall of worry, a fact that those making comparisons to the tech and telecom bubble seem to forget. No wall of worry existed or tested the equity market in 1999. This time around, the wall of worry has scaled to enormous heights.

 

[petit_bateau]

The dot com bubble is well before my time, so I can't really comment on that. The logic makes sense, but I was in my teens... I was more concerned about the next party. I feel like for the last 8 years people have been calling for a bubble to burst when fundamentally it doesn't look like a bubble. Looking back the P/E is a little high, but looking forward the earnings growth is very strong and companies like Apple are basically money printing machines. Forward P/E is still a little high above 20, but not absurd. IIRC the 5 year average is about 19. What I'd say is really happening more than anything is the biggest companies are getting larger and larger shares of the economy and margins are tending to increase. Leading to extreme mega cap growth, while leaving others behind. Without FAANG, SP500 looks rather weak.

To me a sign that we are not in a similar bubble is COIN. Talk about a company with extreme potential, fantastic P/E, fantastic growth... but a rather lousy valuation. Their whole company is blockchain based and the market doesn't understand it and is naturally skeptical... despite some underlying pieces that could signal the next megacap.

I was there. I was a bit older than you, working offshore in the oilpatch in the day job, and making more $$ out of my TMT * stocks than from my pay cheque. The parties were a little bit blurred, even at the time. Overall for me, I kept my shirt. Paid my way through college out of it. It was different for some others, some folk lost a lot, some lost everything.

Here is the key graph to keep an eye on imho. Maybe this time it is different. From a TSLA perspective my personal opinion is that a downturn would hasten legacy-ICE relative demise, but the global macro-economic carnage would perhaps be so great that TSLA would be abolutely no better or worse. The collateral damage of a bust right now would be substantial. Bond rates and Fed papers all tend to suggest the cycle has 2-3 years left to run, which rather awkwardly fits electoral cycles in some countries. Or even in the countries where they don't really do elections. I have missed out on a lot of money over the years by under-estimating the ability and motivation of politicians to keep things going well beyond the point where the rational thing to do was to call a halt.

Shiller PE Ratio - Multpl

Shiller PE Ratio chart, historic, and current data. Current Shiller PE Ratio is 33.52, a change of -0.15 from previous market close.

www.multpl.com

* TMT = technology, media, and telecoms

 

[CyberDutchie]

Just listened to the Lex Fridman podcast interview with Pfizer CEO in which he (Lex) mentioned that he just spend a whole day with Elon.

That’s exciting news to me, I’m speculating an Elon interview by Lex in the near future, it will be the third time he will have Elon on…

 

[StarFoxisDown!]

I was there. I was a bit older than you, working offshore in the oilpatch in the day job, and making more $$ out of my TMT * stocks than from my pay cheque. The parties were a little bit blurred, even at the time. Overall for me, I kept my shirt. Paid my way through college out of it. It was different for some others, some folk lost a lot, some lost everything.

Here is the key graph to keep an eye on imho. Maybe this time it is different. From a TSLA perspective my personal opinion is that a downturn would hasten legacy-ICE relative demise, but the global macro-economic carnage would perhaps be so great that TSLA would be abolutely no better or worse. The collateral damage of a bust right now would be substantial. Bond rates and Fed papers all tend to suggest the cycle has 2-3 years left to run, which rather awkwardly fits electoral cycles in some countries. Or even in the countries where they don't really do elections. I have missed out on a lot of money over the years by under-estimating the ability and motivation of politicians to keep things going well beyond the point where the rational thing to do was to call a halt.

View attachment 746419

Shiller PE Ratio - Multpl

Shiller PE Ratio chart, historic, and current data. Current Shiller PE Ratio is 33.52, a change of -0.15 from previous market close.

www.multpl.com

* TMT = technology, media, and telecoms

S&P 500 PE Ratio Data

PE Ratio data with compelling stories and lessons.

www.stockmarketperatio.com

Eh I tend to look at basic actual data. The P/E ratio of the S&P is nowhere near stretched like 1999/2000 was and in fact, we peaked at the beginning of 2021. The reason for the peak? Earnings continued to expand across the board which brought the P/E back in......even with the S&P continuing to go higher. This has mainly been driven by big Tech, who's earnings continue to expand at a rapid pace. The Forward PE of the S&P is 22.38

If the S&P literally just paused for 1-2 quarters, the P/E would fall right back in line with average of P/E of 17.9. The 20 year average is 23.4. The current P/E is only slightly above that

 

[Rohan]

Yes, corrected, you are right - the one succeeding Merkel, Olaf Scholz.

Ah Olaf, that'll be why progress on the factory is frozen... sorry

 

[henchman24]

I was there. I was a bit older than you, working offshore in the oilpatch in the day job, and making more $$ out of my TMT * stocks than from my pay cheque. The parties were a little bit blurred, even at the time. Overall for me, I kept my shirt. Paid my way through college out of it. It was different for some others, some folk lost a lot, some lost everything.

Here is the key graph to keep an eye on imho. Maybe this time it is different. From a TSLA perspective my personal opinion is that a downturn would hasten legacy-ICE relative demise, but the global macro-economic carnage would perhaps be so great that TSLA would be abolutely no better or worse. The collateral damage of a bust right now would be substantial. Bond rates and Fed papers all tend to suggest the cycle has 2-3 years left to run, which rather awkwardly fits electoral cycles in some countries. Or even in the countries where they don't really do elections. I have missed out on a lot of money over the years by under-estimating the ability and motivation of politicians to keep things going well beyond the point where the rational thing to do was to call a halt.

View attachment 746419

Shiller PE Ratio - Multpl

Shiller PE Ratio chart, historic, and current data. Current Shiller PE Ratio is 33.52, a change of -0.15 from previous market close.

www.multpl.com

* TMT = technology, media, and telecoms

They are at as high of PE as they have been since the dot com bubble. On forward PE, the large caps even far surpass the normal since 2001. But the mid and small caps are actually having a rather low valuations compared to the same time. Mid caps pre bubble were 17-20 (fell to ~13). Today they are hitting around 16. Small caps were in the 16-20 range with the period right before the pop, being heavily concentrated around 19. Today we are around 14-15. The market is heavily working the large cap side of the equation while the mid and small cap are within historical norms... even on the lower side of valuations if anything.

If you look at PEG ratios (which @StarFoxisDown! is kinda explaining in his post), we've actually moved to some of our lower numbers over the past 25-30 years. We are under 1 right now and really we are at some of the lowest points we have been. We are actually near the low of the Covid crash and Dec 2018. Only significantly lower PEG of the SP500 over the last 25 years was the 08 financial crash. Traditionally where we are right now on PEG is a bottom.

The Apples, Microsofts, Teslas, Metas of the world are driving the valuations to a higher degree than we have seen in the past. That may not be a good thing, but it is a different driver than the dot com bubble on the overall PE ratios. We are in an era of establish big tech. IMO the crash that results from that will have a different driver than the dot com bubble.

 

[redan]

This was interesting:

https://twitter.com/x/status/1473039582346285064

 

[Curt Renz]

The shares of EV makers were crushed today; most by far more than TSLA. There was a double whammy. The pandemic resurgence led to fears of longer supply chain disruptions. And a major spending bill that would’ve included enhanced EV purchase credits appears to have been quashed.

Tesla seems to be better than its competitors at skirting supply chain issues. EV incentives appear less needed by Tesla than its competitors. This as Tesla prepares to initiate production at two huge new factories.

Slowing stock market trading as we approach two holidays could reduce pressure on most shares, and perhaps produce a Santa Claus rally.

 

[RobDickinson]

This should be fun

 

[StarFoxisDown!]

They are at as high of PE as they have been since the dot com bubble. On forward PE, the large caps even far surpass the normal since 2001. But the mid and small caps are actually having a rather low valuations compared to the same time. Mid caps pre bubble were 17-20 (fell to ~13). Today they are hitting around 16. Small caps were in the 16-20 range with the period right before the pop, being heavily concentrated around 19. Today we are around 14-15. The market is heavily working the large cap side of the equation while the mid and small cap are within historical norms... even on the lower side of valuations if anything.

If you look at PEG ratios (which @StarFoxisDown! is kinda explaining in his post), we've actually moved to some of our lower numbers over the past 25-30 years. We are under 1 right now and really we are at some of the lowest points we have been. We are actually near the low of the Covid crash and Dec 2018. Only significantly lower PEG of the SP500 over the last 25 years was the 08 financial crash. Traditionally where we are right now on PEG is a bottom.

The Apples, Microsofts, Teslas, Metas of the world are driving the valuations to a higher degree than we have seen in the past. That may not be a good thing, but it is a different driver than the dot com bubble on the overall PE ratios. We are in an era of establish big tech. IMO the crash that results from that will have a different driver than the dot com bubble.

And Big Tech is getting that valuation pump because what was going to be 10-15 years tech transition is being sped up into a 3-4 year time frame thanks to Covid. This is part of the huge transformation happening in the economy that old school Wall St/Economist don't seem to get. There will be a time at which that rapid growth(and especially earnings growth) dies down for the likes of Microsoft, Google, Apple, etc....but for the next I'd say 3-4 years Big Tech will be posting huge earnings growth and they will be driving this market. Once this big transition for Tech is over though, you'll see a long period of S&P consolidation. But again, I don't see that happening for 3-4 more years.

Tesla on the other hand has seen it's multiple compress in 2021....from a P/E of 1200 to 293 and about to be well below 200 after Q4 earnings. So TSLA, as long as they keep executing on their earnings/growth, has a ton of room to run and it makes me not worried about a pause in the overall stock market. We're not going to see huge rallies in TSLA like before where the stock doubles in a year, but the stock can move up 30-50% a year for the next 5 years and still have its P/E compress more.

 

[Chunky Jr.]

Plaid coming to China soon?

Tesla Reportedly Hints Model S Plaid in China Could Be Coming Soon - TeslaNorth.com

Tesla has stopped taking orders outside of North American for its new Model S and Model X refresh, but that hasn’t stopped one delivery center in China from teasing the new electric sedan could be coming soon. As spotted by @42how_, the Hangzhou Tesla Delivery Center reportedly shared a poster...

teslanorth.com

 

[mrmage]

And Big Tech is getting that valuation pump because what was going to be 10-15 years tech transition is being sped up into a 3-4 year time frame thanks to Covid. This is part of the huge transformation happening in the economy that old school Wall St/Economist don't seem to get. There will be a time at which that rapid growth(and especially earnings growth) dies down for the likes of Microsoft, Google, Apple, etc....but for the next I'd say 3-4 years Big Tech will be posting huge earnings growth and they will be driving this market. Once this big transition for Tech is over though, you'll see a long period of S&P consolidation. But again, I don't see that happening for 3-4 more years.

Tesla on the other hand has seen it's multiple compress in 2021....from a P/E of 1200 to 293 and about to be well below 200 after Q4 earnings. So TSLA, as long as they keep executing on their earnings/growth, has a ton of room to run and it makes me not worried about a pause in the overall stock market. We're not going to see huge rallies in TSLA like before where the stock doubles in a year, but the stock can move up 30-50% a year for the next 5 years and still have its P/E compress more.

I can see TSLA doubling this year. With the current macros and EM selling, TSLA ending at 900-1000 this year and 1800 to 2000 next seems doable.

 

[CorneliusXX]

Plaid coming to China soon?

Tesla Reportedly Hints Model S Plaid in China Could Be Coming Soon - TeslaNorth.com

Tesla has stopped taking orders outside of North American for its new Model S and Model X refresh, but that hasn’t stopped one delivery center in China from teasing the new electric sedan could be coming soon. As spotted by @42how_, the Hangzhou Tesla Delivery Center reportedly shared a poster...

teslanorth.com

Strange that they have just canned Euro orders and would then open Chinese orders.

 

[Silent Ludicrosy]

Stock price has been dropping ever since Elon went full supervillain haircut. Now it’s growing back. Bullish AF.

 

[Discoducky]

Indeed the markets will be closed thie Friday, December 24. However, as your posted NYSE calendar notes, there will be no closure the following Friday or the Monday after that surrounding the turn of the year.

Right you are! Thank you!

 

[JRP3]

Some Berlin rumors from Sawyer, take with grains of sodium of course

https://twitter.com/x/status/1473045358783647746

 

[tivoboy]

Wouldn't be surprised if we close Friday at 890-900 and then a push down on Monday to 860 or so with a rebound to 900 before the end of the day and then we move higher as I still think Q4 FOMO will kick in next week.

My target has moved from 870 to 840, so be ready

 

[FrankSG]

I was there. I was a bit older than you, working offshore in the oilpatch in the day job, and making more $$ out of my TMT * stocks than from my pay cheque. The parties were a little bit blurred, even at the time. Overall for me, I kept my shirt. Paid my way through college out of it. It was different for some others, some folk lost a lot, some lost everything.

Here is the key graph to keep an eye on imho. Maybe this time it is different. From a TSLA perspective my personal opinion is that a downturn would hasten legacy-ICE relative demise, but the global macro-economic carnage would perhaps be so great that TSLA would be abolutely no better or worse. The collateral damage of a bust right now would be substantial. Bond rates and Fed papers all tend to suggest the cycle has 2-3 years left to run, which rather awkwardly fits electoral cycles in some countries. Or even in the countries where they don't really do elections. I have missed out on a lot of money over the years by under-estimating the ability and motivation of politicians to keep things going well beyond the point where the rational thing to do was to call a halt.

View attachment 746419

Shiller PE Ratio - Multpl

Shiller PE Ratio chart, historic, and current data. Current Shiller PE Ratio is 33.52, a change of -0.15 from previous market close.

www.multpl.com

* TMT = technology, media, and telecoms

I'm not sure why you would want to look at the Shiller P/E ratio, because it takes the average of the last 10 years of earnings. It's looking backwards, whereas the market looks forward.

The normal S&P 500 P/E ratio peaked at the end of last year (presumably because the market expected strong 2021 earnings), but it has come back down over the course of this year:

S&P 500 P/E Ratio

It's still a little high historically speaking, but it's possible that the market is still expecting significant earnings growth in the near future.