Board 8 > Do people actually believe Elon Musk can solve world hunger?

(+) Yeah! (+)

Colegreen_c12 posted...

It's worth whatever investors think its worth.

Pretty much.

Until you cash out, you are essentially playing with monopoly money.

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Well yeah, but why do investors think Tesla is worth that much? I don't see a way to justify it unless they expect Tesla to basically take over the entire automobile sector. Is something people are seriously expecting, or is the market just irrationally overvaluing them because "it's a tech company"?
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Xeybozn posted...

Well yeah, but why do investors think Tesla is worth that much? I don't see a way to justify it unless they expect Tesla to basically take over the entire automobile sector. Is something people are seriously expecting, or is the market just irrationally overvaluing them because "it's a tech company"?

It's basically people thinking tesla will get a really large portion of the automobile sector in addition to branching out into other industries (solar, robotaxis, etc).

It's actually pretty common to price in some growth expectations in a stock, but I think some people are just crazy when it comes to Tesla.

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NFUN posted...

The logic for why this is an issue is similar to why sales taxes are regressive (two sides of the same coin really). Everybody's stock gets buoyed 12x, and yet the rich still get richer at a much greater rate than everybody else

In this case, the rich are adding value to society by innovating technology, creating jobs and helping to address global warming.

When was the last time you contributed something positive to society?

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foolm0r0n posted...

Around 50% of people (maybe more now?) own stocks and could have chosen to put all their savings into TSLA. Of course that would've been a stupidly risky decision, but it's how Musk made that money.

You're attacking the 50% to try to hit the 0.01%. It's so dumb and typical of modern liberalism.

the fuck does liberalism have to do with it, lol

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BlAcK TuRtLe posted...

In this case, the rich are adding value to society by innovating technology, creating jobs and helping to address global warming.

When was the last time you contributed something positive to society?

Also the main idea is that in like 18 months Elon went from absurd wealth to literally richest guy on earth, meanwhile, every one of his companies are literally only around because of government subsidies.


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BlAcK TuRtLe posted...

When was the last time you contributed something positive to society?

Just this morning I washed my hands after taking a shit.

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ChaosTonyV4 posted...

Also the main idea is that in like 18 months Elon went from absurd wealth to literally richest guy on earth, meanwhile, every one of his companies are literally only around because of government subsidies.

Again, "richest guy on earth" is not who has the highest net worth when you are including unrealized gains. It blows my mind how people are just completely incapable of understanding this very basic fact of economics. If we find out tomorrow that Tesla batteries will all catch fire in 2 days, 90% of his "net worth" will immediately vanish BECAUSE THAT MONEY ISN'T REAL

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BlAcK TuRtLe posted...

Again, "richest guy on earth" is not who has the highest net worth when you are including unrealized gains. It blows my mind how people are just completely incapable of understanding this very basic fact of economics. If we find out tomorrow that Tesla batteries will all catch fire in 2 days, 90% of his "net worth" will immediately vanish BECAUSE THAT MONEY ISN'T REAL

How much do you think 10% of Bezos's net worth is

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How does Musk holding most of his wealth in Tesla stock make it not count? Just because it's not in cash doesn't mean he can't spend billions right now if he wants. He wouldn't even need to sell; he can just take out loans using the stock as collateral to get pretty much as much cash as he wants. If he effectively has hundreds of billions of dollars, why does it matter if it's technically not "real money"?
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You do realize if he takes out loans, he needs to pay them back right, or in this case relinquish the collateral stocks? That being the entire point of a LOAN. So again, how does that translate into real money?

The sheer amount of mindless champagne socialism on this board is gross. You'd think Board 8 would be above the kind of garbage coming out of Twitter/Reddit, but hive minds gonna hive mind I suppose.

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NFUN posted...

The logic for why this is an issue is similar to why sales taxes are regressive (two sides of the same coin really). Everybody's stock gets buoyed 12x, and yet the rich still get richer at a much greater rate than everybody else

You have it backwards. Sales tax is regressive because 5% for a poor person who has 1% expendable income is huge, but for a rich person who has 99% expendable it's nothing.

Investment profit has the inverse effect. The poor person 10Xing their wealth now has 90% expendable income, and the rich person 99.9%. Life changing for the poor person, nbd for the rich, just like sales tax.

To put it another way: A proportionate sales tax on poor people disproportionately hurts them exactly because that same money put into a compound investment would disproportionately help them.

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ChaosTonyV4 posted...

the fuck does liberalism have to do with it, lol

It protects the upper class by grouping it with the middle class

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Xeybozn posted...

Well yeah, but why do investors think Tesla is worth that much? I don't see a way to justify it unless they expect Tesla to basically take over the entire automobile sector. Is something people are seriously expecting, or is the market just irrationally overvaluing them because "it's a tech company"?

It's not a car company, it's a battery company. Look up the current supply vs demand of battery production, esp in the US, and it becomes more clear how big their grip on the market could be.

That said, it is still way overvalued by like 2-5x for where they are now. But that's not an unusual multiplier.

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The stock market is like Character battles on this website. Is Link the best video game character of all time? God no, but he's certainly the most popular with the crowd visiting this site. Tesla is overvalued because they are working on flashy problems, and are being quite innovative in their field. Will Tesla keep a stranglehold on EVs? Probably not, once the big players catch up, Tesla won't be able to compete on quality/price and their stock will tank

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foolm0r0n posted...

Around 50% of people (maybe more now?) own stocks and could have chosen to put all their savings into TSLA. Of course that would've been a stupidly risky decision, but it's how Musk made that money.

You're attacking the 50% to try to hit the 0.01%. It's so dumb and typical of modern liberalism.

That 50% is counting 401ks and other retirement options and you typically can't just say "I'm going all in on Tesla" with your retirement account. Not because it's risky (which it is) but you literally don't get the option to.

The number of people who are individually invested in specific stocks is closer to 10%.

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So since Tesla is so overvalued, when are we going to start hearing about big players shorting it?

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redrocket posted...

So since Tesla is so overvalued, when are we going to start hearing about big players shorting it?

uhh for multiple years now. Shorting Tesla is so old hat at this point that people have realized it's not worth it because it's just going to continue being overvalued

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foolm0r0n posted...

You have it backwards. Sales tax is regressive because 5% for a poor person who has 1% expendable income is huge, but for a rich person who has 99% expendable it's nothing.

Investment profit has the inverse effect. The poor person 10Xing their wealth now has 90% expendable income, and the rich person 99.9%. Life changing for the poor person, nbd for the rich, just like sales tax.

To put it another way: A proportionate sales tax on poor people disproportionately hurts them exactly because that same money put into a compound investment would disproportionately help them.

I'll grant you that, and over time if a poor person becomes not a poor person through smart investing it'll help. I was focused on instantaneous growth, and about "the rich getting richer". A poor person can invest in the same stocks a rich person could, but, as you noted, they only have say 1% expendable income. A 10x gain on that gives them 10% of their salary, while a rich person who dumped 10% of their worth into the same stock just doubled their worth. Much larger proportional gain through that deal and an even more significant raw value increase

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VintageGin posted...

That 50% is counting 401ks and other retirement options and you typically can't just say "I'm going all in on Tesla" with your retirement account. Not because it's risky (which it is) but you literally don't get the option to.

The number of people who are individually invested in specific stocks is closer to 10%.

True. Still, there's a lot of options for stocks that people are increasingly using. It's hard to have extra money for that though. If you're saying that employer managed 401ks are intentional shackles on the working class' investment options and potential then I would agree with you.

But at the end of the day, no one is yoloing their whole savings into Tesla. It's just too risky. But the ones who risk can get a reward. That much is fair.

NFUN posted...

Much larger proportional gain through that deal and an even more significant raw value increase

It's the same here. More risk for more reward, and rich people have a way higher tolerance for risk. Does that mean we can't have any system of risk & reward? No, risk & reward is what enables financial mobility, up and down, which is good.

We can give poor investors some advantages to help even the playing field. There were some nice proposals for that with like investment credits that you get up to a certain income. But any time you start legislating, rich people end up with the advantages. That's why now you can lose everything in the stock market and get bailed out with no risk - as long as you're rich enough.

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