And a bunch of other stocks for that matter
Last year Taught us that the relationship between the stock market and the economy is the best.
Despite some Useful comment underscoring Two are at least to some extent Connected, it is clear that many Americans may lose their jobs and financial security at a time when the stock may rise as if the boom will never end.
It seems that today’s market relies not on their past performance, current performance or analyst-anticipated future performance but on the best future that investors have envisioned for their favorite companies.
It is a gross picture; 2021 is teaching us its microcolleri – small groups of stocks can grow regardless of what is going on with their core principles.
And in the micro-micro case, that Tesla’s Price is unlimited because [fill in your reasons here].
To avoid all the useless Twitter, yes, Tesla’s ability to turn on GAAP profits – many times by selling regulatory credits – is a win, and joining the S&P 500 is great. Delivering 500,000 cars in 2020, 75% of GM’s third-quarter deliveries are fully impressive.
I’m certainly not arguing that Tesla is worthless, or that there are groups of companies like ARK Innovation ETFs, All overpriced. Rather, it seems that today’s market depends not on their past performance, current performance or analyst-anticipated future performance, but on the best future that investors have envisioned for their favorite companies.
If you ever talk about stocks on the Internet, you can see the elements of this logic at work. For example, don’t call Tesla a car company – it accounts for about 87% of the company’s Q3 top line despite automotive revenue. Tesla is the one The battery The company, its religious fans will tell you.
This is why it is okay for Tesla to pay 31x sales, while GM is worth 0.5348x sales today. Amazon, for comparison, is worth 4.6x sales. Tesla shares have the same importance as Twilio in terms of price-to-sales ratio, but the difference is that the car company’s gross margin was 23.5% in Q3 2020, while the software company managed twice. And Twilio is growing more rapidly.