I agree with your first point. I actually figured that we were in agreement here. I was just saying the phrasing of your comment is what triggered the clarifying questions, because I had the same clarifying questions when I first read your comment.
I would have agreed with you on your second statement back in the 90's in regard to companies being valued on their future profits mostly, but that's obviously not true anymore. I think Tesla is the most extreme example of this. You have a car company that has a 200+ p/e ratio and has an order of magnitude higher market cap then many of it competitors that sell more cars. I have heard it all about how they are an energy company or a battery company or a software company, but the reality is shareholders are gambling on Elon, and Tesla because it's popular. Tesla has proven no market that will grow their earnings 100x in the next 10 years that would warrant a risky technical based investment taking into account competitors. Honestly, it's the same as GE saying that in 10 years they will have a nuclear fusion reactor to pump their market cap by 10x putting them in line with Tesla, which is a more plausible scenarios than Tesla actually diminishing their P/E ratio through earnings growth in a meaningful way over that same period of time.
I would have agreed with you on your second statement back in the 90's in regard to companies being valued on their future profits mostly, but that's obviously not true anymore. I think Tesla is the most extreme example of this. You have a car company that has a 200+ p/e ratio and has an order of magnitude higher market cap then many of it competitors that sell more cars. I have heard it all about how they are an energy company or a battery company or a software company, but the reality is shareholders are gambling on Elon, and Tesla because it's popular. Tesla has proven no market that will grow their earnings 100x in the next 10 years that would warrant a risky technical based investment taking into account competitors. Honestly, it's the same as GE saying that in 10 years they will have a nuclear fusion reactor to pump their market cap by 10x putting them in line with Tesla, which is a more plausible scenarios than Tesla actually diminishing their P/E ratio through earnings growth in a meaningful way over that same period of time.