Financing my CT.......Tesla stock or savings account

[CyberT]

Not to say owning Tesla stock is not a great bet for the future, but their will be other ponies in the race.

You are kinda right, every horse race has a 2nd, 3rd, 4th, 5th etc... place finisher. All the reason more that we will see a place for this so-called "competition" fall back in line behind Tesla.

All kidding aside, it is absurd to believe that Tesla will maintain its Market share lead here in the US. But they don't have to. I see the path to 20m cars produced annually by Tesla in 2030. That is twice as much as the current leader producing vehicles today. It is not like consumers will stop purchasing new vehicles, it's that they will be switching from ICE to EV at an increasingly fast pace over the next several years. Yes, the "competition" is coming, but who can produce at scale, profitably? So far, all other manufacturers are years behind where Tesla is today. One day they will catch up with what Tesla is offering today but with the pace of innovation Tesla is running at, we will be in the same spot 5 years from now, talking about the future "competition" that is coming.

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[SpaceDoc]

You are kinda right, every horse race has a 2nd, 3rd, 4th, 5th etc... place finisher. All the reason more that we will see a place for this so-called "competition" fall back in line behind Tesla.

All kidding aside, it is absurd to believe that Tesla will maintain its Market share lead here in the US. But they don't have to. I see the path to 20m cars produced annually by Tesla in 2030. That is twice as much as the current leader producing vehicles today. It is not like consumers will stop purchasing new vehicles, it's that they will be switching from ICE to EV at an increasingly fast pace over the next several years. Yes, the "competition" is coming, but who can produce at scale, profitably? So far, all other manufacturers are years behind where Tesla is today. One day they will catch up with what Tesla is offering today but with the pace of innovation Tesla is running at, we will be in the same spot 5 years from now, talking about the future "competition" that is coming.

The competition is closer than a lot of people think. Other automakers already have everything they need that Tesla had to build from scratch, supply constraints on silicon and batteries aside. So it won’t take long to catch up, and given all the many car makers in the world, at least a few of them will be successful.

Another way for Tesla to maintain their value is if they also sell/license their production technology, and sell parts, like batteries for instance. And open their charging stations to other vehicles. If they diversify their ecosystem in an ever more competitive market, that could keep their valuation high for a long, long time.

 

[HaulingAss]

You’re an experienced investor, but are you a successful one? These two are often not well correlated. ?

As I said in a previous comment in this thread, the world where Tesla is the *only* EV maker does not and will not exist. Therefore, other manufacturers (legacy companies, new ones, and ones nobody’s even heard of yet) will fill the void and make EVs that people have to buy because they can’t afford the premium cost of a Tesla, there are not enough Teslas to go around, or they want to buy another maker’s EV because those other EVs fill their needs better than a Tesla. Also, it is extremely likely that eventually the majority of EVs sold worldwide will not be Teslas.

A great analogy would be Ford making the Model T at the start of the last century. How long was it until they had major competition? Not that long. Years, not decades.

In the real world where Tesla is not the only maker of EVs that people buy, and where massive competition is coming in earnest — this will eventually put downward pressure on Tesla’s stock price. It’s inevitable. Not to say owning Tesla stock is not a great bet for the future, but there will be other ponies in the race.

There will always be more than one auto maker, obviously. No one said otherwise.

But I'm seeing a situation develop that has not existed since the 1920's when the ford Model T comprised 60% of all vehicles sold. And every Model T was black. The Model T was dominant for over two decades and the only reason other makers could exist at all was because Ford could not expand production and their supply chains fast enough to meet the rapidly growing demand. Because Ford could make a better car for less money than anyone else. Yes, it came down to drastically better value. The primary reason people paid more for less reliable, more expensive cars from the competition was because they couldn't get their hands on a Model T in any reasonable time frame.

Tesla is quickly moving into a similar situation. They are growing production by 50-70% every year and the waiting lists still extend out as long as year or even more in some cases. Every quarter their gross margins have been growing. This indicates they have the advantage of pricing power. For example, in the current market climate they are raising prices which will cause their profits to sky-rocket but if the auto market experiences softness, Tesla will be the only manufacturer who can continue to grow production and still sell every one at a profit. Because they have a lot of room to lower prices. This disparity between Tesla and legacy auto is growing, not shrinking. That's going to cause the bankruptcy of many legacy automakers. That's what pricing power does. We haven't seen this since the Model T. The Model T put dozens of automakers out of business because, as the Model T grew production, only the best of the rest could sell their cars at a profit. Consumers want to know that not only is the product reliable and good, but also, does it offer good value. Tesla is constantly innovating their production processes to make a better car less expense to purchase. Tesla's profit margins are a big deal because it means they will be able to increase production ten-fold and still sell every car they make at a nice profit. Even in 2018/2019, before Tesla became profitable, it was obvious this would happen in pretty short order.

Yes, I am an experienced and very successful investor. I started investing as a blue collar worker in the late 1980's and, by age 37 I had retired (exclusively from stock gains). I've been living off my investment returns for the last 22 years and my assets continue to grow at a rate more than 10 times as fast as we can spend it. Even though we spend as much or more than many professionals and continue to collect non-income producing properties over the years. I've never looked back. Most people can't handle not working, I'm beginning to forget what it's like to need a real job. I'm not bragging, just answering your question about whether I really am a successful investor or not.

Tesla has been one of my 3 or 4 best investments depending upon how I measure it and while it will not appreciate as quickly in the future as it did from 2019 to present, it will still greatly outperform the rest of the market (at the expense of higher volatility). Comparing it's valuation to legacy auto is an exercise for misguided fools. The magic ingredient in investing (besides picking great companies to invest in) is time. Patience is key. Volatility doesn't bother me at all because I'm not looking to make a quick buck, I'm looking towards the long-term rate of return. Most investors are their own worst enemies. Always trying to apply "conventional wisdom" to unconventional situations. Always trying to buy low and sell high and being happy with small gains. Time is the magic ingredient. Buy great companies and hold them tight.

 

[Quicksilver]

Tesla stock dove under a thousand a share today.
I sold some blood, robbed the grandkids piggy bank and deposited my secret stash of cash into my Ameritrade account and bought three more shares.

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