STOCK MARKET Thread

[threezero]

Originally Posted by Hehe

First thing first, I'm not looking to start an argument. Just a good educational discussion.

So, can you share why you think TSLA is overvalued? As a shareholder in the long (I'm talking like 5-10yrs holding), I'm genuinely interested in any theory that would fundamentally challenge what Tesla and Musk are doing.

Comparing to legacy automakers, Tesla valuation and its volume sounds a bit absurd. However, when it comes to EV, which is the future of auto industry, like it or not, as many countries/territories are setting deadlines to ban ICE cars outright, Tesla is so far ahead that with all the resources legacy automakers have, they are having problems coming up with a viable competitor.

How many "Tesla Killer" have we already heard? None came close what Tesla is capable of doing (both business and product). You name it, Benz, VAG, BMW, Toyota... etc. The closest competitor to Tesla is Hyundai/Kia. And they never dared to call their product Tesla killer because they know their products are in a different segment.

This to me, it looks like back when the first iPhone was out, and EVERY legacy dumb phone makers failed to adapt. Now they are irrelevant. None of the top 5 phone manufacturers today had any major presence in dumb phone industry and this speaks volume; never take past performance as a future representation. It can offer some guidance on the team's ability to execute, but that ends there.

Thus, I think the fact is that the ICE portion actually became a liability or burden for legacy players instead of an advantage. Their toolings, engineers, and even economies of scale in volume help them very little if any. And the fact that they HAVE to consider both ICE and EV at the same time makes them highly vulnerable to failure when competing with Tesla in EV. I'd go as far as saying I see Rivian, a company that has yet make a single car, as a more valid competitor to Tesla than ANY automakers out there.

And this is before diving into the software part of Tesla as well as the energy, Cybertruck, and all future products.

EV would continue to grow exponentially relative to their ICE counterparts in years to come. And Tesla single handily commands pretty much the entire available battery cell industry. The scale advantage is actually on Tesla side vs. legacy players when it comes to EV.

I have no come back to that. I agree 100% with everything you've said about Tesla. I'm personally a fan of all that Elon does, everything from Tesla, SpaceX to even his Boring company. I also have no doubt that Tesla is and will be the king in the EV space.

What I'm not a fan of its stock valuation. Warren Buffett agrees, hell even Elon himself agrees.

As of the last trading day. Tesla is officially worth more than BMW, Mercedes, the entire VW group, GM and Ford combined.

BMW and Mercedes each deliver approximately 2.5 millions car in 2019. VW group did approx 10 mill cars in 2019. GM did 2 millions or so in 2019. Ford did around 2 million in delivery too in 2019. Thats a combine 19 mil or so cars delivery by these giants in the industry.

Tesla delivered 360k ish cars in 2019 but is worth all of the above combined in valuation.

They are the king of the EV space, what does that say about the space currently then? That is still minuscule compare to the entire car industry.

Not to mentioned TSLA has only been profitable recently (two consecutive quarters iirc, need one more to qualify for sp500 per their "leaked" email)

There is no doubt what TSLA have done is spectacular to say the least. But its current evaluation implies that TSLA is already the king of automotive space and that it will continues to 100x its production and demand year after year to match the valuation it offers to its stockholder. If it maintains its same valuation that is AND for EV cars to completely overtake traditional engines.

Which we know it won't with the way its going, its just going to continue to balloon while its real value struggles to keep up

Stock is forward looking is a relatively new phrase when it comes to investing, the phrase get thrown around with no repercussion as the market just goes up and up. This is not just isolated to TSLA, there are so many tickers that were and still is massively overvalued and price to perfection and beyond. We need a justification for the valuation and forward looking is the best way to justify it.

By the same analogy, Yahoo.com was the most forward looking stock during dot com era. It looked like it dominated the space it was in. It too commanded a valuation that is so forward looking, you would think we would all be using nothing by Yahoo.com 20 years after the dot com burst.

I'm not discounting Elon and what Tesla brings to the future. But how much of its current valuation that is based on speculation and how much is based on real investment?

On some day, You can find more volume in TSLA's way out the money (we are talking $500-$1000 out the money on weekly expiration) option contract than on its actual equities. These contracts sometimes cost as much or even more than the actual price of 1 share of the stock. The speculation that goes on in TSLA alone put the biggest casino operator in shame.

As a shareholder thou, honestly as long as the general market maintains the "forward looking overvaluesness" you have nothing to worry about. We live in a market where result doesn't matter as much as the movement of the equity. The state of the market (not just TSLA mind you) will make any fundamental/value investor question their own beliefs.

But I digress, I haven't done any fundamental analysis on the stuff I've invested in lately. The market clearly doesn't care about this. This is a market where the greatest investor of all times is underperforming barstool and robinhooders.
SP500 is also actively filtering out what they considers to be underperforming tickers for a predominately tech dominated tickers with the same questionable PE and valuation. I wouldn't be surprise if in a few year sp500 consist of nothing but Tech and Tesla.

I just wonder if there will ever be a time when we look back to this like the same way we look back to the 2000 and say yea, this is insane.

[Hehe]

Originally Posted by threezero

But I digress, I haven't done any fundamental analysis on the stuff I've invested in lately. The market clearly doesn't care about this. This is a market where the greatest investor of all times is underperforming barstool and robinhooders.

Thanks for taking the time for the writeup.

I'd chime in the part on fundamentals and how I see it.

As a person who graduated with a degree in Economics, too often, I try to analyze everything with fundamental economic theories. This goes back when I just graduated in 2006 where I thought the Vancouver housing market didn't make any fundamental sense, conventionally speaking, and hence I didn't get into the market that grew all the way until the later part of 2016.

Looking back retrospectively, I think there was no flaw in my analysis based on what I learned and all the laws and concepts in economics that I learned still held. There was one single problem... more precisely, a variable that I did not take into account as it wasn't the historical market behavior that I learned: the Fed (and all the central banks really).

At the time, with the 2008 financial meltdown, the US took the approach of protecting the part that was absolutely essential to prevent a systematic meltdown, and in doing so, it pumped billions of dollars in the market.

Don't get me wrong, US Feds took the rightful approach. They allowed the bubble to deflate as soon as possible, however, to prop up the market, they continued the same practice long after the correction took place and the market had absorbed the impact.

This created a huge inflow of liquidity into the market. US went mostly into the stock market, while Canada, because RE accounts for such a massive portion of our economy, our gov't and BoC kept the bubble going.

Which led us to today. The Fed, prior to the Covid19 meltdown eased quite a bit of its pumping practice as the economy was reaching to a healthy state (relatively speaking). With the Covid19, and being an election year, they had no choice but to return to the old practice of injecting huge liquidity into the market. All that money has to go somewhere. And it continued to pump into stock market as RE is no longer perceived as a safe investment that can offer great returns.

In short, I agree with what you said... there are a lot of speculation, FOMO or whatever going on in the stock market, but I also believe that as far as asset goes, the increase won't stop until the Fed starts easing on the practice. So, I'm just going to ride the wave and continue to hold. I suspect that Tesla will easily reach $2000 a share and more if Fed continues its practice plus SP500 inclusion as there isn't a fundamental problem with Tesla, the only thing is that there are a lot of speculation in its SP that goes beyond fundamentals.

One can go as far as swapping Tesla from that last sentence with any company that has no fundamental problems. Their SP would ride to ATH after ATHs. This would only begin to scale back once the Fed stops its practice. Because fundamentals can't compete with the pocket of Fed.

[Ulic Qel-Droma]

too complex.

just buy what's going up, and short what's going down.

if you're not sure, don't do anything.

[Hehe]

And let the wave continue...

[yameen]

late to the party but i bought $15k worth of tesla stocks today lol. someone pray for me i made the right decision

[HonestTea]

TSLA is mental wow

[Phozy]

Originally Posted by yameen

late to the party but i bought $15k worth of tesla stocks today lol. someone pray for me i made the right decision

annnnnd we wonder how valuations have come this far

[yameen]

Originally Posted by Phozy

annnnnd we wonder how valuations have come this far

cant argue with +$800 in one day lol. but i really like their products and their innovation. hopefully it stays strong. contemplating in buying some more...

[Razor Ramon HG]

At this rate, TSLA will single-handedly bring SPY up to ATH once it breaks in.

[Slifer]

FOMO hitting hard

[Mr.Money]

everyone is riding the wave on tesla for the pump and dump IMO.


realistically its not like everyone cares to buy that brand of car when you're reaching super car prices.

[Slifer]

What is the cheapest brokerage that charges a flat fee? Questrade is a rip off!
Why don't we have commission free brokerage in Canada? Fucking BS

[lowside67]

Originally Posted by Slifer

What is the cheapest brokerage that charges a flat fee? Questrade is a rip off!
Why don't we have commission free brokerage in Canada? Fucking BS

Isn't Questrade like $5-9 a trade? How on Earth is that a rip off... running a brokerage isn't free.

"Free" commission = we will front run your trades and you will pay more in your price for your securities. I'd prefer to pay $5 anyday.

-Mark

[HonestTea]

Originally Posted by lowside67

Isn't Questrade like $5-9 a trade? How on Earth is that a rip off... running a brokerage isn't free.

"Free" commission = we will front run your trades and you will pay more in your price for your securities. I'd prefer to pay $5 anyday.

-Mark

100%

[Razor Ramon HG]

I've always used CIBC and they seem pretty reasonable.

$7.99CAD/USD depending on currency.

I can transfer money into my trading account and use the funds right away. Never had a ticker not available unlike some of my friends using Wealthsimple. OTC trades can be done over the phone for an extra fee.

[ilovebacon]

Originally Posted by Slifer

What is the cheapest brokerage that charges a flat fee? Questrade is a rip off!
Why don't we have commission free brokerage in Canada? Fucking BS

I like questrade because the bank will charge me 10-15$ per trade, while QT will charge 4.95$ per trade.

[Ulic Qel-Droma]

Originally Posted by yameen

late to the party but i bought $15k worth of tesla stocks today lol. someone pray for me i made the right decision

i pray for u

[Ulic Qel-Droma]

Originally Posted by Slifer

What is the cheapest brokerage that charges a flat fee? Questrade is a rip off!
Why don't we have commission free brokerage in Canada? Fucking BS

u dont want commission free. Robinhood makes money by selling users' trading data to high frequency trading firms. that's so fucking corrupt. they sell it tto HFT so they can front run you lol. nothing is free in the world of the markets. there's always a cost.

just use IB. unless you're a huge trader. you're typically only gonna be paying a buck per trade.

IB is the largest firm in the world too. I dunno why anyone would use anything else unless they wanna pay more comissions.

[Slifer]

Originally Posted by Ulic Qel-Droma

u dont want commission free. Robinhood makes money by selling users' trading data to high frequency trading firms. that's so fucking corrupt. they sell it tto HFT so they can front run you lol. nothing is free in the world of the markets. there's always a cost.

just use IB. unless you're a huge trader. you're typically only gonna be paying a buck per trade.

IB is the largest firm in the world too. I dunno why anyone would use anything else unless they wanna pay more comissions.

Please define huge trader? The keywords are "plus exchange, regulatory clearing & transaction fees"
Fuck that shit, I need a brokerage that charge a flat fee. Just got charged $23 on 1 trade in Questrade.
I thought TD with $10 flat is bad enough.

[Slifer]

Originally Posted by Razor Ramon HG

I've always used CIBC and they seem pretty reasonable.

$7.99CAD/USD depending on currency.

I can transfer money into my trading account and use the funds right away. Never had a ticker not available unlike some of my friends using Wealthsimple. OTC trades can be done over the phone for an extra fee.

Do they charge a flat fee? Or are there hidden fees you don't know about like Questrade?

[threezero]

Second what Ulic said.

IB is going to be hands down the cheapest in Canada if you do at least few trade a month.

They also have the industry cheapest margin rate and one of the best in order filling.

IIRC you can even have your TFSA there.

[blkgsr]

i just use BMO, $9/trade

i don't trade daily or even weekly so not a big deal for me. also has mine and my wife's TFSA and it's easy to transfer money into

[threezero]

Everything Chinese is popping these few week.

Their tech sector is still relatively undervalue compare to the rest of the world. AMZN is trading at a 135 pe ratio while BABA is trading at 35ish PE with 10x the market audience/ reach as AMZN.

China is also coming out of a multi year bear market with an actual economy recovery to back up the bull case.

This combine with mainstream media's daily bombardment on China doom and gloom is playing out kind of like the few month after covid crash where everywhere you look at all you can see is bear case for the market from the media while institution is quietly scooping up equities

Long everything China, especially the tech sector. BABA is also suppose to have a split before July 15.

[Gerbs]

Originally Posted by Slifer

Please define huge trader? The keywords are "plus exchange, regulatory clearing & transaction fees"
Fuck that shit, I need a brokerage that charge a flat fee. Just got charged $23 on 1 trade in Questrade.
I thought TD with $10 flat is bad enough.

Are you trading options? QuestTrade is like $5 - 10 Max.

Interactive Brokers has a really low commission rate.

I suggest QuestTrade to a majority of friends because it's free to buy ETF so for passive investing it's perfect. Then I suggest WealthTrade for all our speculative / WSB type of trades. I believe both these sites have referral programs which help even out the commission costs.

[Slifer]

^No, I'm buying regular stocks.