The more it rises in price, the more valid a store of wealth it becomes. The insane recent gains aren’t (just) being driven by internet geeks having a gamble, they’re big wodges of institutional money entering the market.

Define ‘valid’. I would say the more it rises the less stable it becomes and therefore the higher risk. It’s supposed to be a currency, only no one uses it as such (except paedophiles, drug dealers and a few fanatic believers in the true cause). It’s just become the modern day ‘Tulips’, people are only buying it because it goes up. It has no intrinsic worth, isn’t backed by any asset, is totally unregulated, generates no dividends, etc etc.

A lot of the much vaunted Baillie Gifford investment funds are very Tesla heavy. They’ve been forging ahead over the last year, but be careful balancing portfolios that you don’t get too exposed to Tesla.

SMT is only 10% and they regularly rebalance the portfolio to keep the holding in check. Personally I think it’s a relatively low risk way of profiting from Tesla, as you buy exposure at about 10%, ride any gains for a few months, then they take the profits and buy something lower risk eg Amazon is their number 2 holding at 7% of the fund. Over the last year, rather than getting the full 7x gain of Tesla, I’ve doubled my money via SMT; but as it was lower risk I put a lot more money in SMT than I would be happy buying Tesla with.

It was always my understanding that China never expected the cash to be paid back they wanted real estate and that’s what that got. But that’s another thread.

Bit coin is a dirty word on here with some. But as a investment/horse race it’s done me fine and still is tbh. Wouldn’t put the house on it but while it’s about and I can turn a profit I still will.

Define ‘valid’. I would say the more it rises the less stable it becomes and therefore the higher risk. It’s supposed to be a currency, only no one uses it as such (except paedophiles, drug dealers and a few fanatic believers in the true cause). It’s just become the modern day ‘Tulips’, people are only buying it because it goes up. It has no intrinsic worth, isn’t backed by any asset, is totally unregulated, generates no dividends, etc etc.

The FT set out both sides better than I can here: https://www.ft.com/content/608acefb-22ca-44e2-a438-2d874b37d695

Also, advocates would say that everything you’ve written above also basically applies to gold (jewellery and semiconductors not withstanding, but let’s say blockchain is a parallel for those).

I’ve paid a sparky in bit coin. And been paid in it not sure what that makes me.

BoE are worried a lot of people are going to get cleaned out….

https://www.theguardian.com/business/2021/jan/11/bitcoin-be-prepared-to-lose-all-your-money-fca-warns-consumers-risk-productis-cryptoassets

BOE?
FCA do that every 12 months.
Bank of England dipped their toe in a few years ago and got bored. https://www.bankofengland.co.uk/research/fintech/proofs-of-concept/ripple

They are just trying to scare away the weak hands, so the institutions can buy at lower prices.

I like Baillie Gifford. Trust them to manage my Tesla exposure more than I trust myself.

AFC Energy …. Hydrogen power cells, supporting the upcoming extreme E race series, just signed an agreement with ABB and Ricardo. 17pence start of December and peaked around 90p. Just had bit of a lull but back up to 78p today after shares being revalued at £1.91 from a new broker.

I like Baillie Gifford. Trust them to manage my Tesla exposure more than I trust myself.

Active funds under perform against the general market. You hear the about the lucky ones and don’t hear about the thousands that aren’t lucky. Past performance isn’t an indicator of future success.

Tesla is an over valued but profitable company with a good future ahead of it e.g. market leading product, ahead of the competition in technology and a devoted fan base who happily buy their products.

Car companies in general have never been good investments. There are a few, such as Toyota, that have mastered low-cost, high-quality manufacturing, but most of the mass-market car companies have struggled for many decades (see Renault-Nissan, for example). Niche manufacturers like BMW are a bit different, they make expensive toys for wealthy people and have huge profit margins. Tesla are competing with BMW, not Toyota, but just aren’t very profitable. To compete with Toyota, they will need to make cheap, boring cars with very high quality control. Making a good expensive car is much easier than making a good cheap car. I can’t see Tesla becoming a market leader in mass-produced cars, I think they will be lucky to survive as a niche manufacturer.

On the other hand, they may do well as a technology company, supplying batteries, etc. I think there will be much more profit to be made in the technology side of things than in the manufacturing side.

https://edition.cnn.com/2021/01/31/investing/tesla-profitability/index.html

Gamestop

Having lived through the first Dot.com boom the current crazy prices of Tesla and Bitcoin etc have a similar whiff about them.

Not that I’m justifying Bitcoin or Tesla, but…

The current tech ‘bubble’ and the 2000 one are very different. The first tech boom, around 2000, was based on a huge amount of hype, the big bets at the time were fiddling the books and blatantly lying about results eg Enron etc. I worked for a tiny start up with sales of under $1m a year which was valued at $4bn at the peak (our CEO was also blatantly lying about our sales figures).

The current tech boom, FB, Amazon, Apple, Microsoft, Google etc is very differently. Hugely succesful companies, generating huge profits with near monopolies in their market spaces. So, fundamentally they are all very valuable companies, with room to still grow.

Tesla are Bitcoin are also very different. Tesla is a real company, with a real product and profitable. It’s sales figures are growing and it’s market leader in a space which is going to massively expand. It’s also very optimisticaly valued!

Bitcoin is nothing, no intrinsic value, zip. It’s just a speculative asset 99.999% of people buying don’t even understand. It will never become a currency, but might just end up as another asset like Gold / Silver (although they do have intrinsic value).

A lot of the much vaunted Baillie Gifford investment funds are very Tesla heavy. They’ve been forging ahead over the last year, but be careful balancing portfolios that you don’t get too exposed to Tesla.

SMT was 10% last time I looked, they rebalance for you as each fund as a maximum % they can hold in any one stock, so once every few months the fund will sell Tesla and buy more of the others.

Active funds under perform against the general market. You hear the about the lucky ones and don’t hear about the thousands that aren’t lucky. Past performance isn’t an indicator of future success.

On average they do under perform, however some do beat the market for a few years. SMT has more than doubled since I’ve owned it (2 years), making it my best performing asset by a long shot. I first bought it in my wife’s SIPP 3 years ago and her stake has more than trebled in that time! If I look at the companies (other than Tesla) in it, they’re all pretty solid bets eg Amazon is their #2 holding; so I’m happy to stick with it. Their recent rebalance has taken profit from Tesla’s rise last year, so the exposure is only 10% now.