Dear Reader,
The US stock market rally seems to slow down. An interesting case is Tesla Motors Inc. The company is making small(losses) and yet is worth 35 bln USD. I think that a correction in excess of 30% is in store here. I know, that TSLA has a vast potential, but it still sells far too few cars for such a valuation. The valuation bears resemblance to biotech stocks which develop a cure for cancer, alzheimer or diabetes - huge potential but low probability for success.
Apple is an interesting case. The company is worth circa 600 bln USD. It rode the wave of smartphones and tablets. I personally believe it is fairly valued. With Price/Earnings ratio of 16 and revenue close to 200 bln USD it is not a bad proposition.
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Conflicts of interest: I may possess some of the securities or currencies mentioned in the blogpost!
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