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I Justify My Tesla Purchase With This Analogy
Andy - Glad to see that you're taking the feedbacks with strides vs. being defensive. :)
Dollar averaging down is not a prudent investment strategy in and of itself, nor is investing by analogy. However, if your long-term view is that Tesla will become a dominant player in the auto industry and deliver against their stated objectives and milestones, perhaps their valuation will be more in line with the current price, maybe even higher. At this moment, it's really a crap shoot. The challenges facing them are quite formidable:
1) reducing battery costs by more than 50% to hit target Gen III pricing while maintaining gross margins, mileage / range, and performance
2) competitive response from major industry players
3) capital requirements to fund major capacity expansion in-house and/or externally
4) further innovation required in battery technology to enable Gen III. I could be wrong but I think Musk alluded to it in the Q3 discussion when he discussed giga-factory.
5) continual product safety and quality
6) on a more macroscopic level, the state of the world economy which may significantly dampen the demand as well as regulatory environment globally.
Some of these factors are under Musk's control; others are not. It may be well worth your time to invest based on market understanding commensurate with your time horizon and risk tolerance.
Nov 8 12:55 PM
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