[DSingularity]

You know, your point about Tesla has given me lots of conflict. What did I miss? Obviously this question came when I sold off my TSLA stock at 500$ thinking — it was overvalued — and then watching it rise to the equivalent of 4,000$. I reached the conclusion it’s no longer solely about cash flow and debt ratios and market cap and addressable market and whatever other traditional metrics we previously used to value companies. The emotional component has become more important.

People are buying TSLA because they want to do something about climate change. Or maybe cause they worship Musk. This is probably holding for other companies in other industries. Bitcoin is definitely not only being bought because it’s digital gold. It’s being bought because people are emotionally attached to resetting the system. A bunch of middle fingers to the dollar rich (Bitcoin poor) by a bunch dollar poor (Bitcoin rich). This is why people are buying BTC.

Whether it is TSLA or BTC — value itself is being disrupted.

[arcticbull]

> People are buying TSLA because they want to do something about climate change.

I hope given Tesla's new affinity with Bitcoin that what they want to do is "make it worse" lol. Tesla is literally selling its green energy credits to dirty car companies, then throwing it at Chinese coal miners.

The market goes through particularly bubblicious periods of pricing mania from time to time. It's happening now, it's happened before, and it'll happen again. I wouldn't read too much into it.

  "..in the short run, the market is like a voting machine--tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine--assessing the substance of a company." - Benjamin Graham

Prior to the pandemic stimmy money, poor people weren't investing and middle class folks were. When the pandemic hit, poor people lost their jobs, middle class folks kept them. Both poor and middle class folks received stimmy money. The middle class folks invested it.

The whole run up there were trillions on the side-line, and folks who remember 2008 weren't about to let another V shaped recovery pass them by. They plowed money into whatever they could. Literally everything exploded in value last year. My personal trading account is up almost 14X on a 1-year basis today.

It's nothing to do with fundamentals, just a bubble. It'll revert in time, and then it'll grow again.

[DSingularity]

It will only revert if people sell. What if nobody sells because they equate selling with giving up on their dreams of fighting climate change?

[kipchak]

Retail might never sell, I doubt commercial institutions Vanguard for example would not sell for idealistic reasons.

[DSingularity]

Vanguard doesn’t try to call tops. If they sell shares it would be to lock in profit and diversify their EV investment.

[arcticbull]

Again, Tesla makes climate change worse by investing in Bitcoin so if climate change is the driver they should sell ASAP. I think you're overestimating the average speculator's love of the environment.

Yes, this time could be different. Past performance is not an indication of future performance. That said, it would be the first time something's gone parabolic upward (while lacking the fundamentals) without retracing, and I don't see any reason this time would be different.

[edit: Check this out: (1) https://imgur.com/a/HATGeWr (2) https://imgur.com/a/umQLsnK]

[DSingularity]

I’m not debating the subtleties of Tesla’s carbon footprint. Im just asking what if the people buying TSLA are not buying for profit? What if they are buying because they believe it is the way they can fight climate change.

Will it eventually retrace? Probably. Almost surely. But it will probably not matter at that point relative to today.

I think we are in an era where stocks are mostly detached from fundamentals. Ask yourself who truly cares about fundamentals? It’s the uber wealthy who are trying to preserve their capital. Wealth disparity is huge so those numbers are fewer.

The Robinhood investors aren’t pouring over spreadsheets to decide where the best PE ratio tradeoff is most favorable. They aren’t trying to balance growth and income. They are literally buying whatever hyped them the most.

Now regarding the AMD chart. You should consider it in context of their defeat by Intel and subsequent turnaround. That, I think, drove the price movements shown in the chart. Did profit taking from amazing runs also matter? Probably. But you can’t ignore that AMD was nearly bankrupt and had to reinvent itself because it lost so much ground to Intel.

[whobar]

I think you can't judge whether TSLA is overvalued or not until they are no longer instantly selling out of all their products. People are bullish on TSLA because they have a product that many, many people want, more than they have the capability to supply.

Once they have their peak production capacity and have surplus stock across all markets we will get a better idea of their true value.

The most that the price of TSLA and BTC have in common is that both their values can be represented on a graph.

[arcticbull]

Yes, I agree, but I'm confident they're not worth twice the sum total of the entire car market by themselves.

> The most that the price of TSLA and BTC have in common is that both their values can be represented on a graph.

Well, that and one holds a chunk of the other. They're also surprisingly heavily correlated from a price action POV. I suspect there's a bit more going on than meets the eye. Burry tweeted the crazy level of correlation a few days ago.