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What are We Really Selling Here?

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March 03, 2014 – Comments (7) | RELATED TICKERS: TSLA

When I look at Tesla stock, and the volume of press it gets, I try to reach an understanding. And I get it that investors are buying future earnings, growth potential, and a dream of getting rich or just having a secure retirement.

Elon Musk is a smart guy but at the end of the day, Elon Musk has made a lot more money selling that dream to us, than he has selling cars to us. 

So has our investment industry. 

Full disclosure: I have red thumb call on Tesla.

 

Best wishes,

Steven 

7 Comments – Post Your Own

#1) On March 03, 2014 at 12:47 PM, gr8twhtebuffalo (49.97) wrote:

I think the dream he's selling is working. I reside in Phoenix and when I moved here four years ago there were no Teslas; now I see them everywhere.

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#2) On March 03, 2014 at 1:43 PM, Turfscape (44.18) wrote:

Devoish - I agree with you. Tesla is, from all appearances, a really good product that is truly disrupting an industry...but given debt loads and future revenue streams, the valuation is simply ridiculous. It's clear that there are a LOT of speculators out there who are buying the story of Tesla, not the business of Tesla.

I hope nothing but the best success for the company. But, it can't sustain a $30B valuation.

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#3) On March 03, 2014 at 7:37 PM, devoish (98.56) wrote:

Hey greenbear, I have no issue with the car.

Turfscape, yes the speculation is one thing, but the point of the post is that company executives make their money selling shares, not products. 

Best wishes,

Steven 

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#4) On March 04, 2014 at 1:41 AM, jiltin (27.85) wrote:

Anyone can form a company, but will they make a dent in the industry?

I think there is an underestimate of research (10 years), innovation and leadership in the industry.

BTW, I am a green thumb on TSLA ever since I started investing on TSLA and holding half of my original investment. It is 5 times now.

 

 

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#5) On March 04, 2014 at 9:18 AM, devoish (98.56) wrote:

jiltin,

If you had purchased 50 shares or so back around $50 each, you could cash out today and actually buy the car, instead of the company. 

With an average daily volume of 10million shares trading hands, that represents 250,000,000 dollars people with discretionary income are choosing to not buy a Tesla car with. Every day. 

Every 15 days, enough money is spent buying "Tesla the paper stock certificate", to buy every "real economy Tesla car" it has ever sold in its existence.

People who might buy the car are choosing not to, while hoping that somone else does, and sooner rather than later that is going to matter to the stock certificate.

That is what I think, anyway 

Best wishes,

Steven 

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#6) On March 04, 2014 at 7:05 PM, jiltin (27.85) wrote:

Steven,

I bought 650 shares around $40, took profits between $96 and $120, but keeping 300 shares with me as a long term. I have taken out my own money when I sold, but keeping the profit alone as long term. I would not have sold 350, but many of my friends suggested me to take the profit and leave the rest. Hindsight, I really regret doing that.

I always aim no loss (safer side).

I used to see daily one car on the road, but nowadays I see 10+ on the road.

BTW, I am near by Tesla headquarters ( 50-75 miles away ). I focus only bay area tech companies such as GOOG, APPL, FB, TSLA etc. 

You may hate TSLA, may be a personal choice. For me, it is another stock and I do not have any attachement. Hence, I may not end up with Stock Certificate !!! 

 

 

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#7) On March 04, 2014 at 7:16 PM, jiltin (27.85) wrote:

I invest what I know almost like what David K described here.

http://caps.fool.com/Blogs/invest-in-what-you-know/940505

When I noticed more and more Tesla's on the road, I got confidence. Then, I decided to buy. At that time, I used to see 3 cars during my daily trip to work. 

Nowadays, I see almost 10+ cars daily. Still, many competitive car companies (giants like GM, ford) could not match the technology. Until someone beats them, TSLA is good to go. 

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