This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Tesla's Valuation Drives Me Crazy

NEW YORK ( TheStreet) -- I'm getting a very familiar feeling when I look at what's happening with Tesla (TSLA).

I can remember back in March 2000 when the Nasdaq was breaking through 5,300 and dot-coms were trading on very, very thin air. In fact, that is about all they were trading on. Many of these recent initial public offerings had very little in the way of plans beyond the IPO moment.

The S&P 500 was trading at a PE ratio range in the mid-30s back then, and the norm for Nasdaq stocks was usually somewhere in the triple digits. Tech analysts and go-go mutual fund managers were the rock stars of the day. The saying going around the market was, "Valuation does not matter anymore!"

How could valuation not matter anymore?

Well, here we are an unlucky 13 years later and we still are not even close to repairing the damage that was done to the Nasdaq in the years that have followed its 5,300 peak.

Oh, we are finally closing in on 4,000, but 13 years to get this far? I guess valuation matters after all.

It seems that every so often investors somehow lose their sense of valuation when yet another bubble hits. Our two strongest emotions as human beings are fear and greed. We can do silly things when greed sets in.

Like buying shares of Tesla before everyone in America is driving a brand-new, shiny, red, electric car.

It is funny how greed can make us do silly things. It is like we have to get in before it is too late. Unfortunately, by then it is almost always too late!

Why am I picking on Tesla? If you follow me on Twitter, you will have found me warning about Tesla's chart and valuation for the last several weeks.

Data from Best Stocks Now App

I document every tweet about stocks that I send out on the Best Stocks Now App. I think that the record is perfectly clear on Tesla.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs