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The S&P 500 (and other generally similar ETFs) seems well regarded by many members of the forum as a good fit for the equity content of well balanced portfolios. How do people see the effect of adding Tesla - I assume it will be in the top ten holdings -
- initial boost?
- then short term drop?
- then medium term???
- and longer term ??????

Maybe similar questions were asked when Amazon, Facebook, Alphabet, Microsoft etc were added.
Maybe the small % holdings of any one of these will effectively quash any significant effects.

Just looking for others thinking
 

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When Tesla is added to the S&P all the index funds will have to buy large amounts of stock. This should give the price quite a boost.

Based on the stock price, the value of Tesla is already more than GM and Toyota and just passed Berkshire Hathaway. When you consider that Tesla has one product, electric cars, that many other car companies are now making and has never made a profit if you subtract the government subsidies, and then look at Berkshire which owns a large number of well established profitable businesses and generates billions in profits every year, the contrast is startling.

I continue to believe that Tesla is way overpriced and must eventually see a big drop in the stock price, unless it is taken over by some other company and I don't see that happening at today's prices. My guess is that some time Tesla will become yesterday's news leaving Tesla in the same position as other former tech darlings like Global Crossing, Lycos and Blackberry.
 

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I'd say any price boost has already happened. It's priced in, once it's known. I'm sure there are hundreds of PhDs who have already studied the patterns that result from stocks once they are added to the S&P 500. I would not dare to trade against them.

The S&P committee had concerns about Tesla. They previously considered adding it, but decided not to. It's interesting that they are now proceeding with adding it. Time will tell if the committee has made a mistake.

What's great about the S&P 500, like any index fund, is that as index holders we are outsourcing the portfolio management. The committee manages the portfolio, making these hard decisions about Tesla, and we just hold the fund while paying about 0.05% or whatever, in management fees.

Overall the S&P committee has made pretty good decisions over time, so I continue to trust their judgement, and hold the index... I have no idea whether TSLA will turn out well or not.
 

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I'd say any price boost has already happened. It's priced in, once it's known. I'm sure there are hundreds of PhDs who have already studied the patterns that result from stocks once they are added to the S&P 500. I would not dare to trade against them.

The S&P committee had concerns about Tesla. They previously considered adding it, but decided not to. It's interesting that they are now proceeding with adding it. Time will tell if the committee has made a mistake.

What's great about the S&P 500, like any index fund, is that as index holders we are outsourcing the portfolio management. The committee manages the portfolio, making these hard decisions about Tesla, and we just hold the fund while paying about 0.05% or whatever, in management fees.

Overall the S&P committee has made pretty good decisions over time, so I continue to trust their judgement, and hold the index... I have no idea whether TSLA will turn out well or not.
You make a good point here about the S&P 500 committee. I feel like Tesla still does look overvalued but time will tell.
 

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I don't think Standard and Poor makes judgements of the quality of a stock or company. Their index is supposed to represent the 500 biggest companies in America so when an old company fails and falls off the list they are obliged to drop it, and when a newcomer makes the list they have to add it. The only decision is when.
 

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When Tesla is added to the S&P all the index funds will have to buy large amounts of stock. This should give the price quite a boost.

Based on the stock price, the value of Tesla is already more than GM and Toyota and just passed Berkshire Hathaway. When you consider that Tesla has one product, electric cars, that many other car companies are now making and has never made a profit if you subtract the government subsidies, and then look at Berkshire which owns a large number of well established profitable businesses and generates billions in profits every year, the contrast is startling.

I continue to believe that Tesla is way overpriced and must eventually see a big drop in the stock price, unless it is taken over by some other company and I don't see that happening at today's prices. My guess is that some time Tesla will become yesterday's news leaving Tesla in the same position as other former tech darlings like Global Crossing, Lycos and Blackberry.

Tesla is receiving funding from other auto companies, not the government. Every auto maker is free to join this strategy. Tesla is the only company effectively using this strategy, they are winning at the game of capitalism, not government subsidies.

How many billions of tax payers dollars has traditional auto used to prop up their failing business models?

I'd say the stock is pretty high right now, but if they keep achieving their plans of expansion, innovation, and 50% growth per year, I'd bet they will be a $1 trillion dollar company by 2025.

If you look beyond the mainstream headlines, you'll find they have much more going on than just selling cars.
 

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Tesla is receiving funding from other auto companies, not the government.
This is news to me. What auto companies are funding Tesla? I understood he got government subsidies to start the company, and his customers got $7000 from the government for buying the car, and other governments had similar programs. But now they are coming to an end. Would also like to know what they produce other than cars. I know about the space rockets and tunneling but aren't they separate companies?
 

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This is news to me. What auto companies are funding Tesla? I understood he got government subsidies to start the company, and his customers got $7000 from the government for buying the car, and other governments had similar programs. But now they are coming to an end. Would also like to know what they produce other than cars. I know about the space rockets and tunneling but aren't they separate companies?
You said they wouldn't be profitable without subsidies but its not subsidies to Tesla that is helping Teslas profits. Its regulatory credit program(s). Short version is companies producing thirsty vehicles and not enough zero emissions vehicles have to buy 'credits' off of companies that are producing vehicles compliant with the regulations. GM and Chrysler are the recent big purchasers of Teslas credits.

They are also a tech company producing high margin software, and appear to be leading in the race to full self driving, solar roof systems and energy storage systems (residential and industrial systems, they are currently limited by battery production which they are working on). As far as I have found they are also leading in battery technology. If they're new battery cells prove to be successful in the coming months other manufactures will likely have to buy their batteries off them to be competitive. They have many interesting things going on behind the scenes with new innovations in manufacturing technologies that improve quality and reduce costs.

All that said though, a half trillion market cap at this point in time seems rich.
 

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Tesla's stock is pricing in perfection and more. It's not pricing in any competition, margin compression, potential loss of credits, poor build quality, environmental liability, or even safety/recall liability. Maybe none of that is a problem. Rocket emoji rocket emoji rocket emoji to the moon baby, which is the typical investment thesis these days.
 

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This latest $435-600 push could likely be due to people taking advantage of the fact that fund managers are going to have to buy a large portion of Teslas shares, regardless of the price. And theres also rumours that Berkshire H. might be buying Tesla shares. Given Buffets negative comments about Tesla in the past I find that rumour unlikely.
 

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This is news to me. What auto companies are funding Tesla? I understood he got government subsidies to start the company, and his customers got $7000 from the government for buying the car, and other governments had similar programs. But now they are coming to an end. Would also like to know what they produce other than cars. I know about the space rockets and tunneling but aren't they separate companies?
Chrysler Fiat is paying Tesla to pool their fleets for emissions in Europe. Tesla produces solar roof, home energy storage, grid storage systems. Tesla is also leading in vehicle autonomy--they have the best system I am aware of that doesn't require a complex array of sensors or a trunk-full of compute (which adversely impacts range). They are also vertically integrated, and is on track to become dominant in lithium ion batteries. They make a lot of their own components that other automakers outsource.

As Musk describes Tesla, it is expected to be about 50/50 automotive and energy generation/storage. I think the automotive side of the business will be bigger for quite some time but the energy side is promising.
 

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Tesla has increased 800% +since we bought it in January /February 2019 and I am still buying it .I think the value will be in them being a supplier for other automakers ,specifically the battery component.My husband got in a year or 2 earlier but he sold half and took profits which was a big mistake lol.
 

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Tesla has increased 800% +since we bought it in January /February 2019 and I am still buying it .I think the value will be in them being a supplier for other automakers ,specifically the battery component.My husband got in a year or 2 earlier but he sold half and took profits which was a big mistake lol.
Speaking of batteries. Time will tell.
VW’s Battery Bet Reveals Data Showing Tech Could Top Tesla

QuantumScape Corp., a battery startup that counts Volkswagen AG as its largest shareholder, says new data show its batteries can be charged to as much as 80% of full power in 15 minutes, almost twice as fast as a Tesla Model 3.

The performance data, which have yet to be road tested, suggest QuantumScape’s batteries could offer about 50% more miles than the same electric car with current commercial battery technology. They also can be charged 800 times with minimal degradation, meeting a benchmark for batteries in most electric vehicles. But the startup has yet to demonstrate it can mass manufacture its new battery.
 

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^That tech is about 7 years from market and assumes Tesla won't make any progress in that time. QS has Tesla's former CTO on their board, so it is probably not vapourware, but it is not a sure thing.

You should take every battery 'breakthrough' with a grain of salt until it is brought to market in a real world application.
 
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