It’s heresy to the true believers, but Tesla might be just another car company
Wow. Talk about playing the man and not the ball! Perhaps some of the most vitriolic feedback I have encountered has come from those who have chosen to write to me explaining how wrong I am about Tesla (NASDAQ:TSLA) possibly being just another car company.
They’re as staunchly convinced about the company’s prospects as they are about its products.
By way of one publishable example, a reader wrote: “(Tesla) is the most misunderstood company in the world. It is so much more than a car company … This will 10-bag in the next decade and people will have their aha moment.”
My argument about Tesla, which I promoted back in September when the company’s share price was 66 per cent higher than today’s, is that the earnings multiple wasn’t justified by the company’s ageing product line, its struggles in key markets like China, price discounting, a distracted CEO, shifting strategies, and an overreliance on existing models.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
