Tesla is ‘profoundly overvalued,’ and its exclusion from the S&P 500 was a ‘brave’ decision by the index committee, DataTrek says | Markets Insider

In class today I talked about an interaction with my old boss 20 years ago. Our startup was acquired. The P/E rose to 400. I asked my boss “the market average P/E is 16, we are at 400, isn’t this overvalued? Shouldn’t I sell?” At the time he told me “your MBA does not apply anymore, it’s a new economy.” The stock went up in the next month or so from 180 to 250.

Within a year it came crashing back down from $250 to $3. I then asked my boss “does my MBA apply now?” He told me his wife was already upset with him.

So here we are today, 20 years later. TSLA has a P/E over 900. Does my MBA apply?

-Dr. Moore

https://markets.businessinsider.com/news/stocks/tesla-stock-sp500-exclusion-index-overvalued-profoundly-datatrek-committee-why-2020-9-1029575409

One thought on “Tesla is ‘profoundly overvalued,’ and its exclusion from the S&P 500 was a ‘brave’ decision by the index committee, DataTrek says | Markets Insider

  1. I have a regular who talks to me about his investments daily as he comes in to enjoy a beer and look at his portfolio. He’s more interested in options but he has been talking a lot about Tesla lately and made the same remark.

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