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So my financial advisor talked me out of buying $15k of TSLA at $162 couple weeks ago

So my financial advisor talked me out of buying $15k of TSLA at $162 couple weeks ago

I actually called him and asked him to process the trade, but he talked me out of it and sent me 3 separate Investment Analysis reports on TSLA. All three said stock was way overvaluated, and the fundamentals werent in line with 'sound' judgement.

One even said that target should be around $45...not a typo

Then last week happened...

As i see the run up in the last 2 weeks i seriously wonder what i pay these guys for......

I am tempted to post the reports here in forum.....i want to laugh at it....but i feel like crying instead.

earlyretirement | 3 oktober 2013

Yeah, the fire was just a wake up call but even without it..... the valuations are just out of whack at these levels this early on in the game.....

Jamon | 3 oktober 2013

@Kaboom - today the market has given you your desired price of $170. If you want it, go out and buy some! If you're looking for a quick profit, be afraid. If you're looking for long term investment value, I'd say go for it.

Kaboom | 3 oktober 2013

Wayne, i do hope it drops alot because i still am waiting to buy shares and get onto this bandwagon. i just think the street is trying to magnify any issues with TSLA that pops up without even realizing that ICE cars are still far inferior in almost every aspect.....including fire hazard potential

L8MDL | 3 oktober 2013

It hit 168 - did you buy or are you just talkin'... Pump & Dump!! Nearly a full day's volume in the first hour. $$$ just waiting to be made!

NomoDinos | 3 oktober 2013

I just doubled down, let's see how this goes :)

earlyretirement | 3 oktober 2013

People are figuring out that nothing moves in a straight line forever.....

WayneH | 3 oktober 2013

It may drop eventually to below 100 or less. I wish when it was 30 that it had gone up slower as the growth progressed rather than this fast up and fast down.

earlyretirement | 3 oktober 2013

Again, to reiterate I LOVE the company and everything it stands for. I LOVE my car. But won't buy at these valuations.

Remember something... bad things WILL happen. Fires and even deaths. Imagine once the first person that gets in a Model S dies in a traffic accident. No matter what the circumstances of the crash or whose fault it was. It won't matter. All that will you will see in the headlines is "Model S owner dies in crash". Even though many people die each day in traffic accidents, the fact that the crash/death was in a Tesla will make the stock plummet probably 10% or more overnight.

That is the reality of this stock and it shouldn't be in the portfolio of typical/average investors out there, IMHO.

VineetBeniwal | 3 oktober 2013

i bought some today at 169... we all know it will go up at least 15 points after q3 results are announced...

VineetBeniwal | 3 oktober 2013

i got on this bandwagon at 100 sold it at 173 and have been kicking myself since then but bought it again today 169 to make few more bucks before I sell again after q3 results..

fuellss | 3 oktober 2013

VineetBeniwal-We're with you! We put in our order today...We love our car, I mean my husbands car..There is no other car I would rather drive at this point. Sold our Porsche, Mercedes, Lexus and classic Corvette...we just didn't feel the same way about them after driving the Tesla, if that makes sense. We stand behind Tesla..

rdalcanto | 3 oktober 2013

I just bought another 250 shares at 172. Stock stable all day. Fire damage done. With Q3 results a month away, this is easy money.

NomoDinos | 3 oktober 2013

rdalcanto - +1. I'm betting a P85 and change on it ;) I'd taken some profits from $100 to $180, and now have thrown them all back in. What a rollercoaster!

Brian H | 3 oktober 2013

The driver casually pulled over and walked away. No harm, no foul. Best buying opportunity you'll see, maybe ever again.

mna123 | 3 oktober 2013

@brian H, that's what people called when aapl was 650, 600, 550, 500 450 .... and it went to 385.

This stock will be under 100 within 12 months.

Captain_Zap | 3 oktober 2013

It was a perfect storm. Government shutdown, analyst "downgrade" and the first fire all in the same day. I expected a huge sell off. This stock is looking rock solid now.

rdalcanto | 3 oktober 2013

@mna123
If they are selling 40,000 Model S sedans/year in 12 months, which they are on schedule to do, and start deliveries of the first Model X vehicles, there is no way the stock is under 100 in 12 months. Elon himself would have to die in a Model S fire, with no Model X in sight, for that to happen.

WayneH | 3 oktober 2013

They would have to sell 400,000 model S a year to justify the current valuation, not 40,000. Great car, Great company, Unrealistic current stock price. There is no guarantee they will sell 40,000 model S next year. What if they sell only 35,000? Model X is scheduled for 2015, not 2014, and it is not clear whether recent fire may force alterations in design in model X which could postpone launch.

mna123 | 3 oktober 2013

@rdalcanto |

AAPL makes 40 billion $ profit dude, sells 9 million iphone on first weekend ... it didnt help ....

rdalcanto | 4 oktober 2013

@mna123
Well, I made a bunch of money today, how about you?
Are you confident enough in your prediction that you are shorting TSLA?

@WayneH
No, selling 400,000 Model S sedans will support a valuation much higher than 180. There is a thread that shows how TSLA will support a stock price over 2,000 in 6 years with a P/E ration around 50. Even if off by a factor of 2, I think a stock price over 1,000 in 6 years will be well supported.
http://www.teslamotorsclub.com/showthread.php/20584-Analysis-of-Sal-Demi...

tes-s | 23 oktober 2013

So, what do you think now?

Do you agree with your advisor, and are no longer interested in buying the stock at $162?

Or are you going to use this chance to buy it at that price?

xradr | 23 oktober 2013

bump up ... kaboom, did you buy?

PapaSmurf | 23 oktober 2013

Love the car.
Won't touch the stock at this high price.

Need to separate the two issues. I could easily see this trading back at $100 in the next 12 months.
It would then be trading at about 4x to 5x revenue which would still be a healthy growth premium for the company.

At $100 per share it would still be a high price per share, but at least then it is just a high growth rate premium. At $165 to $190 that is bubble territory. Just my opinion.

eking | 24 oktober 2013

There are a lot of very smart people who believe for objective reasons that TSLA is overvalued as things currently stand today. There are hurdles facing the company that have not yet been sorted. Anyone who bought at $20 and sold at $40 doubled their investment in a very short amount of time. There should be no complaints. If you bought at $40 and sold at $100, same thing. That was a wonderful profit to make, far better than what you'd make in an Index fund. People who believe it is reasonable to buy at $170/share and expect make double in the next couple of years are cuckoo in my view. Not going to happen. I was always told you buy for the long term, not the short term unless you are a professional trader and you stare at market performance screens all day. I would buy when it falls to the low 100's and then be prepared to hold on to it for a good long while.

Tesla-David | 24 oktober 2013

I brought TSLA when it IPO'd at $25/share and am in long term. I brought the stock because I share the vision of Elon Musk and because I love my Model S, and believe EV's are the future. Judging by the reaction I get every day when I drive my Pearl White MS-85, the positive exchanges from other drivers on the road and from people passing by in parking lots validate this judgment.

Aleksandyr | 24 oktober 2013

We need some follow up? did you fire your advisor? Did you jump back in recently. Everyone is echoing the fact that the stock has gotten ahead of itself, but there are many people that are just hearing about tesla or getting interested. So there are still alot of people wanting to get in. I am trying to walk the edge by selling puts at 170 and 140. I can't see it doubling in the short term like it did. Certainly a wild ride.

stephen.kamichik | 24 oktober 2013

Last year my cousin's financial advisor dissuaded her from buying Tesla shares at $27 per share. She is now pissed off at him. I am glad I bought shares at $27 per share.

rdalcanto | 24 oktober 2013

@eking
I disagree. I think there are a lot of smart people who do not understand the Tesla business model or product, and therefore think TSLA is over-valued.

Please take the time to read this:
http://www.investnaire.com/?q=groups/tesla-much-needed-reality-check-depth

It explains how TSLA is actually under-valued right now, as we expect several years of 100% growth with no need for outside capital investments.

P.S. - I bought more stock at the dip. $10,000 worth at 164.
No way a company with will be doubling production every year for years to come will go back down to 100.

eking | 24 oktober 2013

@rdalcanto, if what you write is correct, they "double production every year for years to come" then you are probably right. But they are going to have to get a lot bigger to do that. They will also have to win battles with states like Texas that won't let them sell directly here. A lot of consumers are too lazy to go through all the hoops to get a Tesla in a state like TX. They don't enjoy the process the way many of us did. :) Heh.

Brian H | 24 oktober 2013

Cox, above, suggests there is likely 100% TSLA growth/annum until at least 2018. Load up! >:) If that means cumulative, it's a 32X multiple by then.

SMinnihan | 6 november 2013

Send your broker a thank you note!

sunkat | 6 november 2013

So did you give your advisor a nice bottle of wine??

Kaboom | 6 november 2013

HAA! I havent had time to call him yet, but i will. No i didnt end up buying anything, although when it did dip to $163 off its highs from 193 several weeks ago i was so tempted to get in. But i went on a business trip overseas and got too busy with work to act on it.

My advisor is still thinking that all the math points to fair value around 100 or less, but he also said that its a very difficult stock to gauge by traditional measures, so he admits it could still very well outperform. But its definitely a gamble, and he doesnt get paid to gamble or venture into stocks they dont understand.

But its up to me if i want to buy it, and would be part of my 'self' managed portion of my portfolio.

carlk | 6 november 2013

Fire the adviser if he/she accepts the bottle of wine. A real good adviser should have told you to buy when it's at 160 and told you to sell when it's at 193. ;-)

Of course no one can be that good although many people are pretending they are and others are fantasizing that they could.

rdalcanto | 6 november 2013

With 21% profit margins that will increase to 25% next quarter, 100% growth next year if deliveries double, and news like this:
http://www.autoworldnews.com/articles/5037/20131105/china-cuts-new-car-s...

You need to fire him if he doesn't tell you to buy a lot now.

PapaSmurf | 6 november 2013

I think the broker was 100% correct. The stock could easily fall to $100 per share. You can be a fan of the car and recognize that the stock is overvalued.

Gizmotoy | 6 november 2013

@rdalcanto: I doubt any financial adviser would recommend you invest, even now. Even if they do double production, it still wouldn't justify even the price after today's crash. The price is speculative. The second they hit a glitch or stop executing, the stock will tumble. Model X delayed? Major stock tumble. Gen 3 delayed? Major stock tumble.

If you're in it long term you *may* be fine if Tesla continues to execute well and future cars are as good as the S, but you'll have to endure a lot of volatility to get there.

rdalcanto | 7 november 2013

I think this 3rd car fire is a game changer. I was going to invest more at the end of the current dip, but I'm going to hold off now until we get a fix for the current battery design. I know the stats on ICE fires, but I think the Tesla battery needs to be protected from road debris a little better than it is.

Shesmyne2 | 7 november 2013

Ok, Kaboom.
Didya buy it NOW?

Still Grinning ;-)

eking | 7 november 2013

Like I said two weeks ago, I will buy when it hits the low 100's. At $140 a share it is still a bit inflated but it is getting at least more realistic. FWIW, I think anyone who buys at $140 and plans to stay in for the long haul will do nicely with this stock.

bradslee | 7 november 2013

For short term traders (they are NOT investors), trading TSLA is purely a gambling. For long term investors, buying TSLA at time like this when most people fear would earn your last laugh several years later.

chrispga | 7 november 2013

Are oil companies buying Tesla's and catching them on fire?

chrispga | 7 november 2013

Or people trying to lower Tesla stock so they can buy it. Remember that Tesla wasn't as well known at its IPO. So many heavy hitters missed their chance to get in at a good price.

Tesla will be successful, why? 1. More people will buy the cars, regardless of the fires. 2. The Model X will sell and the Model E will sell like hotcakes. 3. Tesla is building the infrastructure for its EV vehicles. Free is better than any gas price.

Be suspicious of these fires and yes, I know how conspiracy theory this sounds. But think of how much money big oil will lose if Tesla is successful...

carlk | 7 november 2013

@bradslee That's the way to go. I sold some of my Netflix stock too early but let the rest rode to $300. All these happened before 12'. Then I saw it crash down to $60. What I told people then is finally I got my second chance. I'm glad that I did take that second chance.

tes-s | 11 november 2013

Seems like lots of buying opportunities for all those who were looking to get in around $170 a share, $160 a share, etc.

Jamon | 11 november 2013

I am fully drunk on the Kook-Aid, so obviously I see this week as a tremendous buying opportunity. Still, I would never expect a financial advisor to add it to your portfolio. It's much too risky for a conservative advisor - and probably isn't a prudent investment when it comes to other peoples' money. However, when it comes to your own money - and it's a company that you love enough to spend countless hours on a forum daily to learn more - it's probably worth finding some spare money that you can afford to use for a risky investment. Because with increased risk comes the potential for much larger rewards.

If you can see the long term potential of the company right now, and most of wall street is hung up on a string of fires (caused by accidents), a PE ratio through the roof (because earnings are still in the very early stages of a loooong and steady increase), and a stock price that has increased too much too quickly (regardless of what its true value may be), then you may be in a rare position of actually having better information than the pros. I say you should take that opportunity before it evaporates.

Kaboom - if I were you I would have the advisor allocate 10% of your portfolio to TSLA, and let him make the best investment decisions he can make with the other 90%. Check in every 12 months to see who is doing better. After a few years he'll be unable to deny that you made a wise decision during a time that seemed very scary and risky. In a decade you may find that your TSLA shares will be worth more than the rest of your portfolio combined!

The key is to buy and hold. Once you're in, don't pay attention to the daily/weekly/monthly volatility. It's both exhilarating and frightening - but when it comes to investment decisions you need to check those emotions at the door and just let it play it's course. I believe you won't regret it!

Brian H | 12 november 2013

Jamon;
Said well. ☺

tes-s | 12 november 2013

The opportunity keeps getting better!

JZ13 | 12 november 2013

Jamon +1 - we are back on the same page!!!! haha

Jamon | 12 november 2013

Wow - I got the seal approval from Brian H!! ... and he didn't even care that I said Kook-Aid instead of Kool-Aid :)

JZ - We've been on the same page all along - sometimes it just takes an economic crisis to clarify things :)

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