I agree that Tesla shares may be overvalued based on foreseeable potential earnings over the next 5-10 years.
HOWEVER, most of our major winners over the last 10 years or so seemed overvalued at one time or the other. Here are some examples:
AMZN: It traded 10 years ago at $85. Its earnings that year were $2. It had negative earnings in 2012, and under $1 in 2013. It went negative again in 2014 before finally turning positive for good in 2015.
FB: It traded in 2012 at under $20. Its earnings that year were 2 cents! In 2013, its earnings jumped to 60 cents and the stock climbed over $50. The earnings dipped again in 2015 before starting a steady climb. The stock price in 2015 was close to $100.
AAPL: This stock does not fit the pattern of the first two examples. In fact it has the opposite problem to TSLA, it has always appeared UNDERVALUED! As late as 2009, AAPL traded at under $30. Its earnings in 2009 were a very respectable $1.47. Over the next 10 years, AAPL grew its earnings 7-fold, and the stock price has kept pace.
I do not know what TSLA stock will do over the next 10 years. What I do know is that I have driven a Model S for the last 3 years and I am getting a Model X in June. Tesla is simply the best car I have ever owned, and I am over 70.
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