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posted by martyb on Saturday August 22 2020, @12:35PM   Printer-friendly
from the ev.com-bubble? dept.

Tesla stock reaches $2,000 amid soaring interest in EV companies:

Tesla's stock closed at a record high of $2,000 on Thursday, pushing the company's market capitalization to $370 billion. Tesla has been on a weeklong rally since announcing a five-for-one stock split. The split will be distributed to anyone who holds the stock tomorrow—Friday, August 21.

A little more than two months have passed since Tesla's stock first reached $1,000 per share. Last month, Tesla announced a solid second-quarter profit of $104 million. It was the fourth straight quarter of profits.

That could qualify Tesla for inclusion in the S&P 500 stock index. If Tesla wins a slot in the S&P 500, funds that track the index would need to buy Tesla shares. That could push the stock price up even further.


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  • (Score: 0) by Anonymous Coward on Saturday August 22 2020, @12:42PM (36 children)

    by Anonymous Coward on Saturday August 22 2020, @12:42PM (#1040337)

    What goes up, must come down.
    Spinning wheel, got to go 'round
    ...
    Ride a painted pony,
    let the spinning wheel turn.

    https://www.youtube.com/watch?v=SFEewD4EVwU [youtube.com]

  • (Score: 3, Insightful) by FatPhil on Saturday August 22 2020, @01:00PM (23 children)

    by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Saturday August 22 2020, @01:00PM (#1040344) Homepage
    It can't be a bubble, a bubble would see things like Apple reaching a market cap of 2 trillion. Oh...

    Handy hint, boys and girls, it might actually just be the fiat currency that's dropping, rather than the value of pieces of paper soaring. What's that 'brrr'-ing sound I hear?

    I foresaw this years ago (as I watched Mike Maloney's /The Hidden Secrets of Money/), and bought silver (at bullionvault.com, so real silver, not ETF fairy stories), et je ne regret rien. Other metals are available (OK, one other metal, you can guess which one).
    --
    Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
    • (Score: 1) by shrewdsheep on Saturday August 22 2020, @01:10PM (8 children)

      by shrewdsheep (5215) on Saturday August 22 2020, @01:10PM (#1040350)

      If you foresaw it, why did you buy those metals then? Shares are both resistant to inflation and are productive, whereas raw material is not productive and it is also subject to fluctuations due to actual use. Historically, shares gain 7% per year. They might perform better due to the tremendous inflation we have at the moment (why don't figure show it? The numbers are made up, see hedonic calculation).
       

      • (Score: 1, Interesting) by Anonymous Coward on Saturday August 22 2020, @03:12PM (6 children)

        by Anonymous Coward on Saturday August 22 2020, @03:12PM (#1040404)

        One of the details that people forget about is that even if you bought gold at it's lowest point and sold at it's highest point, the result is still a fraction of what buying an index fund for the same period would have netted. Plus, if you're buying metal for the apocolypse, other metals would be far more useful, gold is nice in that it is resistant to chemical processes, but it also makes it largely worthless for anything other than it's coloration and shininess. On top of that, the few uses it has chemically are limited greatly by it's relative rarity. The end result is a metal that sucks as an investment.

        • (Score: 1) by anubi on Saturday August 22 2020, @06:50PM (3 children)

          by anubi (2828) on Saturday August 22 2020, @06:50PM (#1040493) Journal

          Neodymium?

          Now that is valued by what it's used for.

          --
          "Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
          • (Score: 0) by Anonymous Coward on Saturday August 22 2020, @07:48PM (1 child)

            by Anonymous Coward on Saturday August 22 2020, @07:48PM (#1040502)

            Ah, like for when spending 20k per speaker isn't a completely ridiculous idea.

            • (Score: 1) by anubi on Sunday August 23 2020, @08:49AM

              by anubi (2828) on Sunday August 23 2020, @08:49AM (#1040723) Journal

              I was thinking more down the line of the electromechanics for wind turbines, electric cars, modern appliances, planes, etc.

              --
              "Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
          • (Score: 5, Interesting) by JoeMerchant on Saturday August 22 2020, @08:59PM

            by JoeMerchant (3937) on Saturday August 22 2020, @08:59PM (#1040524)

            Neodymium, tantalum, even cadmium is valuable until the SHTF, afterwards not so much.

            Afterwards, you'll be wanting more of your basic iron, copper, maybe aluminum and some of the simpler, better known alloying metals.

            --
            🌻🌻 [google.com]
        • (Score: 2) by FatPhil on Sunday August 23 2020, @08:29AM (1 child)

          by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Sunday August 23 2020, @08:29AM (#1040715) Homepage
          Index funds do well until they don't. Charts of indexes priced in gold are available, you might find them surprising.
          --
          Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
          • (Score: 0) by Anonymous Coward on Sunday August 23 2020, @12:21PM

            by Anonymous Coward on Sunday August 23 2020, @12:21PM (#1040754)

            When index funds don't do well, damn near everything else doesn't do well. That tends to be when tons of businesses are going out of business taking any bonds they've issued with them and employees are being laid off in droves leading to a lack of money with which to buy other things.

            You'd never want for that to be your entire portfolio, but you'd have to be a genius with bad investment timing to lose money with one.

      • (Score: 2) by FatPhil on Sunday August 23 2020, @08:18AM

        by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Sunday August 23 2020, @08:18AM (#1040712) Homepage
        My metal has grown at way more than 7% per year, and I expect it to continue to do much more than that. PMs are pretty much the only thing that aren't in a bubble right now. Looking for a pullback, so that I can pick up some more.

        This is not financial advice, do your own thing.
        --
        Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
    • (Score: 1, Interesting) by Anonymous Coward on Saturday August 22 2020, @01:52PM (6 children)

      by Anonymous Coward on Saturday August 22 2020, @01:52PM (#1040363)

      I agree with shrewdsheep above, but I did take a quick look at gold last week.

      Markups are enormous, like 20% and up for 1 oz US gold coins obtained from the US mint (site was confusing, do you buy from mint directly, or do you have to go through local coin dealers?), and worse for fractional sizes. If you should decide to sell, I'll bet the markdown may actually be worse. The market is just not liquid enough. If you should make a profit, then the US government will be at your door to collect a punitive 28% tax.

      Silver on the other hand has a different industrial demand profile, and at ~$30/oz is too cheap for being a convenient value store.

      foobar.com, so real silver, not ETF fairy stories

      If you're not holding the metal in your hand, how can you be sure governments won't just haircut it from you, or the principals of the company absconding?

      If you're looking to protect against inflation, my choices would be either (value) stocks or land. Those assets have been historically privileged by governments. Gold could be useful if you are willing to pay the premium to have the metal somehow save your life in the future, but if the SHTF hard enough, I wonder how you will be able to effectively use it. Silver is just too cheap and heavy, and the price is driven more by industry than investment. Finally, with the metals, you have to contend with new discoveries and improved production methods increasing the supply.

      • (Score: 2) by EvilSS on Saturday August 22 2020, @02:09PM

        by EvilSS (1456) Subscriber Badge on Saturday August 22 2020, @02:09PM (#1040369)

        site was confusing, do you buy from mint directly, or do you have to go through local coin dealers?

        You can't buy it direct unless you are a registered dealer.* After all, can't just put that unnecessary layer of middlemen inserting themselves in the transaction out of business now can we?

        *Exception is for proof coins, but the markup is astronomical if you are buying for bullion value.

      • (Score: 5, Insightful) by JoeMerchant on Saturday August 22 2020, @04:58PM (4 children)

        by JoeMerchant (3937) on Saturday August 22 2020, @04:58PM (#1040452)

        Back in the late 1970s local coin shops would sell 1.0oz Krugerands for exactly the price per ounce quoted on the evening news. When it came time to sell them, those same shops would only pay 90% of the quoted price, so that's a big margin to overcome, but not impossibly big if you're holding for a couple of years.

        The true value of anything is what people are willing to pay for it. In the right circumstances, a ham sandwich is worth more than a gold Rolex.

        --
        🌻🌻 [google.com]
        • (Score: 2) by istartedi on Sunday August 23 2020, @12:53AM (3 children)

          by istartedi (123) on Sunday August 23 2020, @12:53AM (#1040580) Journal

          A lot of people don't get this. Gold merchants make money on the *transactions*. A lot of them even have it right there in their names, e.g., Joe's Gold EXCHANGE.

          The spreads on physical gold transactions are stuck in the past--fixed percentages of quantity, like stocks used to be. The introduction of ETFs has changed that somewhat. You can buy and sell ETFs with no transaction fees, just like stocks; but you generally don't get physical delivery unless you jump some really high hurdles (in the case of the GLD fund, you must be a registered broker-dealer capable of moving 100,000 shares). Then there is Kitco Pool [kitco.com] which is more within the grasp of small investors. Note the spread between buy and sell prices... followed by "small premium" for conversion in to physical metal, which ain't so small.

          Turns out, the best way to make money with gold is to facilitate transactions with it [youtube.com]... as long as you don't cheat and/or piss off Eddie Murphy and his friends because of a stupid bet.

          .

          --
          Appended to the end of comments you post. Max: 120 chars.
          • (Score: 2) by FatPhil on Sunday August 23 2020, @08:36AM (2 children)

            by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Sunday August 23 2020, @08:36AM (#1040716) Homepage
            Kitco has terrible spreads, nearly 2% at time of clicking. And do you actually own real metal with them, or just promises?
            At time of clicking, spreads here are between 0.02% and 0.55%, depending on the market and currency:
            https://www.bullionvault.com/market-depth.do?previousCurrency=USD&considerationCurrency=EUR&securityId=AUXZU&marketWidth=8&priceInterval=10&unitOfWeight=KG
            --
            Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
            • (Score: 2) by istartedi on Sunday August 23 2020, @04:37PM (1 child)

              by istartedi (123) on Sunday August 23 2020, @04:37PM (#1040833) Journal

              Those spreads are low because it's "vaulted gold" -- no better in security than the Kitco Pool. If I were in that market, I'd just buy GLD with zero transaction costs. It's just as trustworthy, if not more. You can get coins from there too, but only to a UK address, and then you're right back to bigger fees. [bullionvault.com]

              Oh, and while we're still on the topic I forgot to mention that in the USA the IRS taxes physical gold as a "collectible" with a much higher capital gain rate.

              Gold really brings out the toll-takers!

              --
              Appended to the end of comments you post. Max: 120 chars.
              • (Score: 2) by FatPhil on Sunday August 23 2020, @09:38PM

                by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Sunday August 23 2020, @09:38PM (#1040925) Homepage
                You're wrong about the security. I own the metals I buy, the government of the country I live and pay my taxes in has that point of view - there's an audit every night that proves what my holding is. GLD's a fucking joke, there's no similarity at all. Please, buy GLD, your eventual tears will make those of us who own real metal laugh.

                And why do you you say "vaulted gold" as if it's inferior? It's in a guarded vault and ensured. That's unimaginably safer than, and thus superior to, having the metals on my own property, and I'm perfectly happy to pay the absolutely minuscule fees for that storing. guarding, and insuring.

                And regarding Stupidoland, all I have to do is mention 1933 and Roosevelt. The US govt. either hates or loves gold, depending on your point of view. I live in a country where there isn't even any VAT on gold or silver, so if I did want stuff in my hands, I could historically get it at about spot + 2-3%. Of course, actual metal now is as rare as rocking horse shit, so good luck with that, anywhere in the world.
                --
                Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
    • (Score: 2) by looorg on Saturday August 22 2020, @02:50PM (2 children)

      by looorg (578) on Saturday August 22 2020, @02:50PM (#1040393)

      Did you buy bars of actual metal or did you buy a digital paper that says you own a bar of metal? Those would be two very different things. If the apocalypse comes one might have value while the other one just became toilet-paper.

      • (Score: 0) by Anonymous Coward on Saturday August 22 2020, @03:15PM

        by Anonymous Coward on Saturday August 22 2020, @03:15PM (#1040406)

        Ironically, toilet paper is likely to have more value in that scenario than gold. At least one of those two things has some actual utility. Gold just sits there and stares at you.

      • (Score: 2) by FatPhil on Sunday August 23 2020, @08:24AM

        by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Sunday August 23 2020, @08:24AM (#1040714) Homepage
        Actual metal, owned solely by me. Stored in guarded vaults. Insured. British and European governments both agree that the metal is mine (they know about it for tax purposes and money-laundering prevention), and that's good enough for me. So technically, it's just "digital paper", but so is anyting of value that you lock in a guarded vault.

        You've got a car in your garage? If someone steals it, all you're left with is the car keys. Does that mean that you don't actually own the car because all you have in your hands is the keys?
        --
        Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
    • (Score: 1) by fustakrakich on Saturday August 22 2020, @07:22PM (3 children)

      by fustakrakich (6150) on Saturday August 22 2020, @07:22PM (#1040497) Journal

      These amazing numbers come from Wall Street's 30 billion dollar a day habit, courtesy the Fed

      --
      La politica e i criminali sono la stessa cosa..
      • (Score: 0) by Anonymous Coward on Saturday August 22 2020, @08:25PM (2 children)

        by Anonymous Coward on Saturday August 22 2020, @08:25PM (#1040514)

        I expect Trump to ask the Fed to discontinue the support on his reelection. It's time for the market to discover price and value again.

        • (Score: 2) by JoeMerchant on Saturday August 22 2020, @08:55PM

          by JoeMerchant (3937) on Saturday August 22 2020, @08:55PM (#1040523)

          I expect Trump to lose, and do everything in his power to crash the market as fast as possible afterwards. It's pretty incredible the lengths and they went to and temporary short term measures they used to pump it up when he got in.

          --
          🌻🌻 [google.com]
        • (Score: 1) by fustakrakich on Saturday August 22 2020, @09:59PM

          by fustakrakich (6150) on Saturday August 22 2020, @09:59PM (#1040534) Journal

          Of course not! He will double it. In fact, they stopped counting. It's just wide open. This is no more a "Trump" thing than the 2008 heist.

          --
          La politica e i criminali sono la stessa cosa..
  • (Score: 3, Interesting) by Phoenix666 on Saturday August 22 2020, @01:19PM (8 children)

    by Phoenix666 (552) on Saturday August 22 2020, @01:19PM (#1040352) Journal

    The market is enthusiastically anticipating where Tesla's going, but inclusion in the S&P 500 is a real driver for its valuation. It means every mutual fund manager and every other institutional investor who holds the basket of stocks to match that index will now need to buy Tesla stock; I have read some estimates that say they will need to buy $100 billion of stock, either from existing shareholders (which will drive the price waaaay up), or in a secondary offering from the company that will dilute existing shares of Tesla but will funnel all that extra money directly to the company. The latter option is not too bad for existing shareholders because the company can turn right around with that capital and build new factories and take other steps to widen the disruption they've already brought to the auto industry. It is a huge industry, and disruption like this is rather a once-in-a-century kind of phenomenon.

    According to Tesla analysts, the company is taking other disruptive steps also. One is that they're working on mass producing the factories that mass produce the cars. The factory they built in China was built in record time, and they're aiming to do the same with the new factory outside Austin, TX. A second move is their battery tech; they recently acquired a battery company called Maxwell that they're expecting to improve its cars' range and recharge time. A third is they're working on their own home-grown car insurance they're touting will cost 20-30% less than policies from established insurance companies; that would disrupt a whole new industry. There are others, too, like reducing their manufacturing costs (like they did with the CyberTruck).

    So, yeah, the stock price is soaring, but it's not entirely without reason.

    Yes, I do own Tesla stock.

    --
    Washington DC delenda est.
    • (Score: 0) by Anonymous Coward on Saturday August 22 2020, @01:42PM

      by Anonymous Coward on Saturday August 22 2020, @01:42PM (#1040358)

      > Yes, I do own Tesla stock.

      Hope you enjoy the ride! I don't, but if I did my small "investment" would be for the fun of it all.

    • (Score: 2) by JoeMerchant on Saturday August 22 2020, @01:47PM (4 children)

      by JoeMerchant (3937) on Saturday August 22 2020, @01:47PM (#1040359)

      The stock doesn't "need" to go any higher, taking the capital infusion would definitely be the way to go.

      Even still TSLA's market cap today is 380B, as compared to 26B for Ford, 41B for Chevrolet, 217B for Toyota, 45B for Honda, 22B for Panasonic, 30B for Johnson Controls... Even with a $100B cash infusion from an enthusiastic market, $380B seems like an ambitious valuation for the company.

      --
      🌻🌻 [google.com]
      • (Score: 0) by Anonymous Coward on Saturday August 22 2020, @02:02PM

        by Anonymous Coward on Saturday August 22 2020, @02:02PM (#1040367)

        True, but why is Toyota valued so much compared to Honda? AFAIK Honda even has more business lines than Toyota does.

      • (Score: 0) by Anonymous Coward on Saturday August 22 2020, @03:19PM (2 children)

        by Anonymous Coward on Saturday August 22 2020, @03:19PM (#1040408)

        Market cap is a complete joke, one sucker way overspending on a stock is enough to cause that. If I had a company with 10 shares and somebody opted to pay $1m for one of those shares, my company would have a $10m cap, if they were willing to pay $1, then the same business would have a $10 cap. Think about that for a bit, market cap just measures the number of shares times what the last damned fool was willing to pay. Tesla is worth all those billions of dollars in spite of the fact that their selling cars at a loss. The components alone constitute nearly the entirety of the sale price. Last I hear anything about it, the labor would have to be less than a few hundred dollars in order for them to make money selling the vehicles. So, unless they're making massive amounts on servicing them after sale, they're not making any money like that.

        • (Score: 2) by JoeMerchant on Saturday August 22 2020, @04:50PM (1 child)

          by JoeMerchant (3937) on Saturday August 22 2020, @04:50PM (#1040446)

          Market cap is a complete joke, one sucker way overspending on a stock is enough to cause that.

          For a thinly traded stock, maybe.

          For something with daily trading volume in the millions of shares, and billions of dollars, it's not just one sucker overspending, it's billions of dollars a day being staked on the notion that there's billions of dollars worth of bigger suckers coming in the future to spend more. Sooner or later, the market does "correct" to something approximating the value of the company - whether that's multiples of trailing annual profit, revenue, anticipated revenue, or assets - sooner or later it's based on something.

          In this example, I bought in when TSLA's market cap was ~$40B (not long ago, in other words), so if they can turn this hype into a $100B secondary offering, they literally have sucked more cash out of the market than the market thought they were worth a few short months ago. I do hope Elon is smoking the right blend and pulls this one off - as opposed to boneheaded Tweets like "thinking about taking TSLA private..."

          --
          🌻🌻 [google.com]
          • (Score: 0) by Anonymous Coward on Sunday August 23 2020, @12:29PM

            by Anonymous Coward on Sunday August 23 2020, @12:29PM (#1040756)

            Yes, but the same idea applies even with a more popular stock, it just takes more suckers. Just look at all the people that bought Enron and MCI Worldcom before they collapsed. Or the myriad tech companies that don't do anything other than disrupt with no business model. There's tons of examples out there were market cap has no meaningful relationship with the actual value of the company. It's just a measure of how effective the company bullshit artists were at convincing people to buy in.

            But, it is at least marginally better than the share price that the DJIA uses to pick it's membership. There's even less relationship between actual value of the business and share price between splits, reverse splits and stock buybacks.

    • (Score: 1) by fustakrakich on Saturday August 22 2020, @07:28PM

      by fustakrakich (6150) on Saturday August 22 2020, @07:28PM (#1040499) Journal

      So, yeah, the stock price is soaring, but it's not entirely without reason.

      Thank the fed's price supports. This is a black hole...Nothing good will come out

      --
      La politica e i criminali sono la stessa cosa..
    • (Score: 2) by stretch611 on Sunday August 23 2020, @12:39PM

      by stretch611 (6199) on Sunday August 23 2020, @12:39PM (#1040764)

      Yes, I do own Tesla stock.

      I used to own Tesla Stock.

      I bought it pretty close to its IPO. Since its skyrocketing rise, I sold it all here in there in about 5 sales over the last 2-3 years. The last sale it was roughly $1200 a share. Though, the majority was sold when the stock was only around $300.

      It made me wish I bought a lot more way back. Notice that I do not regret selling it "too early." I made a huge profit on all of it. (of course all of it was in my IRA so I will not see any of the profit for a few years....)

      The fact is I am currently one of the seemingly rare "bears" on the market right now. When it crashes, whiplash will be a kind condition in comparison. I now have cash to buy stocks after a major correction.
      Currently the P/E ratio on the stock market is just as high (or even a little higher) than it was before the tech bust at the start of the millennium. The worldwide economic conditions are in disarray... there is the virus, brexit, china-usa trade war, posssible credit crisis in the housing market due to possible evictions (if tenants are not paying rents, many landlords can pay their mortgage either)... Essentially, their is a fiscal tsunami going on. There are only 2 things (IMO) keeping the market at a peak... The fed pumping cash everywhere... and fear of missing out (FOMO) people see stocks as the only way to make a profitable return.

      Eventually sanity will return to the market... you do not want to be holding overpriced stocks then... because selling them at that time will be like catching a falling knife... its very hard to do... and extremely easy to get hurt.

      (note: I am not a financial expert so follow my advice at your own risk/peril. While I have cash now... roughly 1/3 cash... I still have a bunch equity and see some of the current gains even if I am wrong; but I do not think I have had this much in cash ever before.)

      --
      Now with 5 covid vaccine shots/boosters altering my DNA :P
  • (Score: 3, Touché) by JoeMerchant on Saturday August 22 2020, @04:55PM (2 children)

    by JoeMerchant (3937) on Saturday August 22 2020, @04:55PM (#1040451)

    What goes up must come down.
    What must rise must fall...
    And what goes on in your life
    Is writing on the wall!

    If all things must fall,
    Why build a miracle at all?
    If all things must pass,
    Even a miracle won't last.

    What goes up must come down.
    What must stand alone?
    And what goes on in your mind
    Is turning into stone!

    If all things must fall
    Why build a miracle at all?
    If all things must pass,
    Even a pyramid won't last...

    How can you be so sure?
    How do you know what the end will endure?
    How can you be so sure
    That the wonders you've made in your life
    Will be seen
    By the millions who'll follow to visit the site
    Of your dream?

    What goes up must come down...
    What goes 'round must come 'round...
    What's been lost must be found...

    --
    🌻🌻 [google.com]
    • (Score: 0) by Anonymous Coward on Sunday August 23 2020, @12:50AM (1 child)

      by Anonymous Coward on Sunday August 23 2020, @12:50AM (#1040578)

      Thanks, had not heard that before!

      • (Score: 2) by FatPhil on Sunday August 23 2020, @09:45PM

        by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Sunday August 23 2020, @09:45PM (#1040926) Homepage
        Alan Parsons Project. Has some very good stuff in his oeuvre. I do have an autographed copy of /Pyramid/ somewhere. I think I probably want /Old and Wise/ played at my funeral.

        Thanks JM for the reminder, I shall retire to that album tonight.
        --
        Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves