Don’t let Tesla go crazy: The lesson of Bitcoin is so quicktoforgotten?

BEIJING, Feb. 5 (Xinhua) — Tesla is making a big splash in the stock market, and its growth trajectory is not as high as the usual hot companies, the stock price is soaring, the trend is close to the parabolic market. Tesla’s recent surge in share prices has led some investors to compare it to Bitcoin’s surge in 2017.

How strong Tesla’s rally is, first look at a set of data. In the past two trading days alone, Tesla’s shares have risen a record 36 percent to $887. Tesla’s share price has soared 180 percent in the past three months. Tesla’s share price has soared more than 395 per cent since hitting a low of $178.97 on June 3 last year.

By contrast, the tech-heavy Nasdaq composite index, which outperformed the 500-stock index and the Dow Jones Industrial Average, has gained just 12.3 per cent in the past three months, 5.5 per cent this year and nearly 30 per cent since early June.

Tesla’s share price has soared in part because of analysts’ unprecedented bullishness, and the improved quarterly results have raised questions among some Wall Street investors who believe Tesla’s share price is rising too fast.

Lessons for Bitcoin

Michael Novogratz, a Wall Street professional, contrasted Tesla’s surge in share price with a parabolic-like quote that Bitcoin had seen before. After helping found the AccountS Investment Group, an investment management company, Novogratz left the private equity market in 2015 to enter the digital currency space.

The so-called parabolic market refers to the market in a very short period of time, the market appears huge fluctuations, the trend in the form of a similar semi-parabola to accelerate. The direction of the parabola may be up or down.

Don't let Tesla go crazy: The lesson of Bitcoin is so quicktoforgotten?

Tesla has a similar parabolic trend to Bitcoin

His comparison of Tesla to Bitcoin may not be outrageous. Back in early 2017, the price of bitcoin began to soar, rising from about $885 to $197.83 million by November, a staggering 2,100 percent increase.

For a long time, however, the price of Bitcoin fell rapidly after peaking. On the positive side, the price of Bitcoin remains at $9140. The price may not be reassuring for investors betting that Bitcoin, the world’s number one digital asset, will rise further.

Tom F. Tom Lee believes some of Tesla’s gains could be due to investment managers in the Russell 1000 growth index adjusting their portfolios to better match Tesla’s weighting in the index.

“Tesla’s weighting on the Russell 1000 is only 0.7 percent, but it’s 15 percent of the gains so far this year,” he said in a research note Tuesday. Last year, Tesla’s stock returns were broadly in line with the overall market and volatile, so many managers are likely to reduce their holdings. “

In any case, many market watchers now recommend caution about buying Tesla stock. At the moment, one of Google’s most popular searches is: “Should I buy Tesla stock?” “It’s reminiscent of the time when Bitcoin went up, when some investors were also searching online for whether to buy bitcoin.

Opponents say they can’t understand.

As Tesla’s rival, Xiaopeng, the founder of Xiaopeng Automobile, also tweeted a comment on Tesla’s stock rally. He said he couldn’t see why Tesla’s share price had risen so much.

Don't let Tesla go crazy: The lesson of Bitcoin is so quicktoforgotten?

He Xiaopeng’s Circle of Friends

“A lot of friends ask me why I’m up so much, and I can’t tell you the truth. I’ve always insisted that within a decade, smart cars will have companies with a market capitalisation of more than $100 billion to $100 billion, and Tesla and Apple are very strong players. But the difference between cars and mobile phones is so great that it’s hard to form a huge winner-take-all and ultra-high gross margin, so I don’t see the logic of such high valuations at the moment, unless it’s a real long-term holder. He said.

Some analysts believe that Tesla’s share price after the increase has been relatively fully reflected in its fundamental conditions, the current share price is in a higher position. Some investment managers said that with Tesla’s share price surge, do not rule out the recent adjustment. (Author/Rain)