Tuesday, August 2, 2011


I work across the street from Tesla's Fremont factory, and see the enormous factory each morning as I drive to work. 

I read a recent report that said: 

Morgan Stanley provided color on Tesla Motors (NASDAQ: TSLA). In a research report published today, Morgan Stanley stressed that the company's outlook will probably remain grim until the launch of its Model S.
In the report, Morgan Stanley states, “Tesla is within one year of its targeted commercial launch of Model S. Until that time, sales volumes and quarterly EPS will likely be poor indicators of future success.”
At the moment, the rating agency has an Overweight rating and a price target of $70 placed on the company's stock. On Monday, TSLA added 2.13% to its value to finish the day at $28.77.

** end of the report.

There are a couple things going on here.  Morgan Stanley releases a news report which probably affected the stock price to some degree.  Surprisingly, the stock went up 2.13% despite the report of a grim future until the launch of the Model S, so there must be something going on here that I'm not understanding, which is no surprise, because I don't know anything about stock price valuations and the way the world really works. 

There is a target price of $70, which is pretty high.  Hopefully I can learn more about what these reports mean.  True value is found when I can more accurately assess the reality and predict the future than competitors. 

Just like the Black Swan, that will likely be painful and require going against conventional wisdom and what everyone else is doing. 

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