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Comment by bestinterest | Hacker News Reader

I am also really confused. I'm a complete noob and have been trying to learn a bit more about markets and evaluating companies but it seems like so many companies have price to earning ratios of > 30. I mean even $NET (Cloudflare) literally do not make money right now so don't even have a P/E ratio?

If anyone has any light books to understand markets more please do share.

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Rivian has in $0 revenue, yet somehow manage to be worth $77,68B

Tesla same thing, extremely overpriced

i remember recommending my friends to buy Tesla stock at $50

today i wouldn't recommend anyone to touch it with a 10 foot pole

Tesla shipped 900k cars in 2021. That’s extreme growth from 2020. If they grow they same this year, by the end of it, they’ll sell more than any other automaker, and if they continue into 2023, they might end up selling more than all other automakers combined.

Leaving this aside, there is also the idea that Tesla is a battery company that just happens to put them mostly on cars. So there could be massive growth beyond that.

Then you check Ford, and it sells less cars each year.

So Tesla valuation is huge, with the expectation of it taking over the whole automotive market by 2024…

The moment this expectation disappears, it’s price will correct itself.

Even Elon Musk thinks that Tesla stock is overvalued. He's said that every time he says that the price goes up, he has no control over it either.

but if the price doesn't go up he'll get margin called and would have to sell tesla

A book that has guided my approach (just buy an index fund) is A Random Walk Down Wall Street by Burton Malkiel. It goes over the history of stock markets and stock picking giving evidence that very few people are going to beat the average, even those paid to do so.

Well, I also warned them about Cloudflare and indicated to them to sell after the AWS announcements. [0] At the time of my comment, it was >$210 a share.

Just look at the responses in [0], telling you to buy more and hold it at the time.

Now it is 50% down since then. I tried to help, but they did not listen.

[0] https://news.ycombinator.com/item?id=29355360

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