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Tesla: Lithium Market Realities Point Towards Long Term Pain In Shares

Jan. 05, 2022 5:10 PM ETTesla, Inc. (TSLA)TM, TOYOF, VLKAF, VLKPF, VWAGY, VWAPY382 Comments
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  • Tesla is currently valued at multiples that could make SaaS software companies blush. The stock currently assumes that the company will grow unimpeded for decades.
  • The product produced is undoubtedly good, but the company currently appears to be priced for perfection with no margin for error at all, either internally or with its suppliers.
  • In the current environment where high multiple peers are crashing, Tesla seems poised to follow suit eventually and the magnitude of the losses could be extreme.
  • The reality and vulnerability of the lithium market provide little hope that Tesla realistically can hit its goal of 20 million vehicles by 2030.
  • Current holders would be wise at a bare minimum to cash out their cost basis here.

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I do not usually write bearish pieces, in general, I tend to keep to myself or simply ignore stocks that fit a bearish narrative for me, for Tesla (NASDAQ:TSLA), however, I simply cannot ignore what I see as the precarious

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I work in the financial and property management industry for a well known, publicly traded "mini Berkshire" Insurance company. I focus on portfolio structure, value, reasonably priced growth, tech and biotech spaces. I passed the series 6 and 7 exams at age 18 but do not at this time have active licenses.My passion for investing and personal finance education began at a very early age. I opened my first brokerage account at the age of 12 and have invested through crashes, crises, recessions and bubbles. I have made many mistakes in both my personal and investing lives, however, each mistake I have made has taught me valuable lessons on my journey, both in life and towards financial independence. As of March 2023, my total portfolio has compounded at 10.2% per year since 1993, beating the S&P 500's return of 9.87% over the same time period. I do not currently hold active licenses and I am not a financial advisor and do not give out or publish investment advice. Articles I write are my opinion only and are not solicitations, please seek guidance from a licensed financial advisor before investing in any security. Opinions expressed in my articles are my own and do not reflect or indicate any positions or opinions held of my primary employer.

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