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In the stock market, there are two fundamental types of companies. The first type constitutes classical businesses, which are appraised in the antiquated manner: by their cash flows, by real revenue, and by marginality. This is mathematics. The second type is the so-called “dream companies.” Their valuation is built not on a calculator, but on pure faith that in the future they will be able to earn a lot of money.
Tesla (TSLA), unfortunately or fortunately, is not only a classical automotive company. With a price-earnings ratio that already exceeds the insane mark of 250x, and capitalization that eclipses all global automakers combined, the market tells us with extreme clarity: By purchasing Tesla shares, investors are not buying electric vehicles. They do not give a damn about cars. They are buying a lottery ticket to the world of robots.
