Is Tesla worth more than the rest of the automotive industry?

Musk is the richest man in the world, Tesla is worth more than the rest of the industry. Rivian, although it has produced several dozen cars so far, is worth more than Volkswagen – due to the stupefying effect of the magic of large numbers, many people still take it seriously.

If you type in the search engine, the words “Elon Musk” or “Tesla” you will immediately come across dozens of articles that display Musk’s “billions” and all misinterpret the words “the richest”, “the most expensive”. Tesla in these messages will be worth more than the rest of the automotive market, and Musk will be able to lose or gain billions of dollars in a few hours, depending on how many twits he throws.

All these numbers are complete nonsense, the total value of stock capitalization, in no way, does it translate into the real value of today’s companies or anyone’s private property. Lunar valuations do not have the slightest coverage in the value of real assets of companies, and they look even more absurd when compared, for example, with the annual profits (and often losses) of such companies.

With a few exceptions, this madness is the result of an absurd mix of fashion, sheep’s momentum, both individual and institutional investors, cheap money pumped by politicians and central banks, and the primitivism of investment algorithms that have been training for years on this pathological system.

There is one more pathological phenomenon connected with these valuations, the returning boomerang theme of the billionaire wealth tax. Since company valuations are absurd, any change in the price of a stock, whether caused by burnout, a burnout of stupidity, or a skillful act on the emotions of players, changes the valuation of assets by billions of dollars in a matter of hours. Some would like to tax these increases (it is strange that they do not mention how to settle possible “losses”) …

However, instead of writing about the absurdities of this solution in the context of billionaires, I will refer to your personal experiences. Comparing by analogy to what happens to us is always more effective than such virtual examples. If there are those among you who hit a housing hole around 2012/13 and bought a flat then, your fortune, measured by the value of this flat, could have increased even threefold (and maybe even more). You could turn your place into a hiding place at that time, and you will be ahead anyway.

I bet that this idea will not appeal to anyone, even those who are loudly gagging about reaching Musk. The increase in the value of the assets in your hands, although more realistic than the valuations of many companies, will not change anything, until you become homeless, read, you do not sell your home.

In summary, if in a few days it turns out that Musk will throw in a twits “for 10 billion” (regardless of which way), remember that most of it is very virtual money. What is valuable for Musk are technologies, cars, ideas, and the approach to their implementation. Technologies are real, the financial world behind them is to a large extent a game of appearances.