A growing star in the small world of fund managers, David Giroux, has some harsh words for the current stock market and especially Tesla’s stock.
He said he would not touch Tesla’s stock even though it fell 90%.
Over the past few years, Giroux has become a prominent figure in the conservative investors’ world.
His Fund, T. Rowe Price Capital Appreciation, has an annual return of 11.9% – and beats S&P and literally 99% of its competitors.
The success has led T. Rowe to give Giroux another three funds to control recently.
In a round table with barons, the portfolio manager warned about overestimated shares, and Tesla was at the top of his list:
“Tesla could fall 90% tomorrow and I wouldn’t buy a share because it’s just crazy overrated palantir, I wouldn’t buy a share – crazy overrated. Costco wholesale -[at a price of] 49 times earnings, Walmart, 37 times – doesn’t make sense. “
Tesla’s stock is currently trading with more than 200 times earnings, which has been in decline for two years now, and there is no end to the deterioration in sight.
Despite the falling earnings, CEO Elon Musk has claimed that the stock is on the verge of walking 10x and “wiping out” those who map the stock.
But with Tesla’s EV business in decline, he himself admits that Tesla’s stock depends on solving autonomous driving and humanoid robots, and there is no strong proof that Tesla is leading in these fields.
Electek Tag
While I tend to agree with Giroux about this, Tesla’s stock is on the fact that people are willing to overlook Elon Musk’s lies and misleading statements.
Given that many investors still trust him, it is unclear how long Tesla can maintain a 200 P/E.
I certainly wouldn’t bet against it because of it.
I worry though. Tesla weighs heavily on S&P and therefore on many people’s 401K.
While many people still believe in musk, I think more and more people are aware that he is not worthy of blind faith and may not be this techno savior that many still consider him.
By launching Robotaxi before he was ready, Musk also put a watch on Tesla to deliver, and if it continues to fall behind Waymo, I could see more people having their “realization” moment with Musk.
The combined with Tesla, which is likely to face some terrible quarters due to increased competition in China and Europe, and an expected slower of EV sales in the United States, starting in the 4th quarter, there is a real opportunity for a withdrawal.
There is a real chance that Tesla can lead a market junction with the crazy valuations we see across the entire market.
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