I’m a big believer that some kind of crypto currency will own the future. Although, I don’t necessarily think that Bitcoin is that currency. But even so, even I acknowledged that the big Bitcoin price rise of 2017 was a bubble waiting to burst.
Above you can see the 2nd half of 2017 where Bitcoin was on a slow rise until December when it suddenly took off. It topped out at price of nearly $20,000 per coin. Then it was over almost as fast as it began. On this Christmas Day it’s at $7,163 which is less than half it’s 2017 high.
If you compare Bitcoin’s 2017 price action you can’t help but see uncanny similarity to Tesla 2019. Down to the December acceleration. I think we’re also going to see a similar spectacular descent for the Tesla stock price in 2020. The question is when.
Tesla may yet get one more profitable quarter here in Q4 but after that there is nothing to look forward to for Tesla investors. Don’t forget that when you buy a stock, you’re actually buying the future profits of that business. And if you calculate the level of profit that Tesla has to achieve to justify it’s current stock price, it’s out of this world. There isn’t enough profit in the automotive world to justify $300 per share let alone above $400. But hey, if you think that Tesla can consume the entire automotive industry and make more profit than Apple, Google, and Amazon combined go for it.
The price of Tesla’s stock is unlike other companies in that it’s not related to it’s performance. As such, it doesn’t matter how high it goes because eventually it’ll crash when reality settles in. If you saw what happened to Bitcoin in 2017, it feels like we’re watching a replay in 2019.
If you compare Bitcoin’s 2017 price action you can’t help but see uncanny similarity to Tesla 2019. Down to the December acceleration. I think we’re also going to see a similar spectacular descent for the Tesla stock price in 2020. The question is when.
Tesla may yet get one more profitable quarter here in Q4 but after that there is nothing to look forward to for Tesla investors. Don’t forget that when you buy a stock, you’re actually buying the future profits of that business. And if you calculate the level of profit that Tesla has to achieve to justify it’s current stock price, it’s out of this world. There isn’t enough profit in the automotive world to justify $300 per share let alone above $400. But hey, if you think that Tesla can consume the entire automotive industry and make more profit than Apple, Google, and Amazon combined go for it.
The price of Tesla’s stock is unlike other companies in that it’s not related to it’s performance. As such, it doesn’t matter how high it goes because eventually it’ll crash when reality settles in. If you saw what happened to Bitcoin in 2017, it feels like we’re watching a replay in 2019.
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