Much of that is basic common sense and I think that many of us deep down know it to be true but.........it isn't the market narrative
I think we all know that the ice is getting thinner and that we are going to fall through, maybe not this week, month or quarter but...........it can't go on. It isn't "different this time".
There is a tug-of-war between the narrative and what we know from history.
look at the move in bank balance sheets 2004=>2007 - hailed at the time as evidence of the strength of the sector and ever growing profits but pretty obviously a time bomb
long ago, I was forecasting for a very well known US three letter acronym. Holding the growth rates meant that withing 10 years they would have needed to sell something to every man, woman and child in the UK every four days. I tailed off the growth rate and received a public bollocking for my lack of faith in the Board of my employer and was asked in front of dozens whether I thought I was working for the right company. One of us was right - it is something I have never forgotten. Narrative v common sense.
TSLA has a PE north of 100
they also have
Rising competition
an aged model line up
margin pressure
dawning of reality about the move to EVs
governments that cant afford or have different policy priorities than subsiding buyers of Teslas
A history of screwing over buyers and leasing companies by playing with prices
A product with limited life........batteries dont last
A CEO who is a drag outside his fan base and is actively antagonising those he needs to drive EV adoption.
If you removed the name from the debate what would you expect to happen to the SP of a company facing those headwinds on a PE of >100? If I told you these are the numbers for a company called "Wibble" would you be a buyer or a seller?
I see a lot of tetchiness on these boards and others too. i believe many PIs are screwing up their faces waiting for whoever is going to pull on the wax to rip out the hair. We KNOW, this is going to end badly in some areas and we KNOW for some famous names there won't be a V shaped recovery as they are staggeringly overbought.
We all know that when it cracks, the babies will go with the bathwater but, sanity will reassert itself. So, the question is, what is sane in these markets?
I recall people on here with portfolios that were everything BG sold. It was a great strategy until it wasn't, and when it wasn't, they suffered the NAV fall compounded by sentiment souring. How short our memories