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Comment by lotsofpulp | Hacker News Reader

> Isn’t this how stock markets work? Actual company performance is just a relatively minor signal for the chicken.

In my experience, actual company performance is a very huge signal. You just need to zoom out and look at longer timeframes. The stocks with the highest prices and gains over the long term are those with the highest profit and growth potential.

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Like Tesla? Wouldn't Tesla have to have a monopoly on the entire automotive industry to realise their P/E? And as for profit they don't make any at the moment, IIRC

Tesla just reported its first full-year profit last month, so that's no longer true.

Tesla is probably overvalued, but it's also not as simple as Tesla == cars. They're also one of the leading players in grid level battery storage (a market that will be huge soon). I don't think any other auto manufacturer is involved in that.

Tesla still has to sell something like 21x more cars to match Toyota for example who they dwarf in market cap.

Tesla are putting their eggs into cars which are extremely hard, and batteries which will be a commodity long before Tesla can extract enough value.

Probably? They grew only 22% last year and trade at over 25 times SALES.

IIUC Tesla's value comes in part from failed bets against it. Investors looking to make a buck off its imminent failure were instead forced to pay out, in greater proportion, hedges made on those short bets, when it survived.

The same thing happened with GME, just on a shorter time scale and with the completely out-of-context event of retail traders being shut out of the buy side of market trades for several days. We do not know what would have happened had GME continued to be freely traded on a day it had reached over $500 a share premarket.

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