Reposted from Seeking Alpha
By Brian Langis
This is a response to an article written by Chris Umiastowski, a 10-year veteran of the sell-side equity research, tech investing expert, and special contributor to the Globe and Mail. Here is the link to the article: I bet on Tesla because most investors don’t understand electric cars. Please note that it’s the Globe and Mail that titled his article. It’s surely controversial. I suggest you read his articles first to have a better understanding of his though process and my response. Chris tends to focus on longer-term trends rather than short-term trading opportunities. I know Tesla is a very popular stock on Seeking Alpha with many smart bulls and bears. I’m sharing this with the purpose to better inform potential investors and exchanging. Enjoy!
Dear Mr. Umiastowski,
Your article published on January the 6th state that the main reason for “betting” on Tesla (TSLA) is because most investors don’t understand electric cars. You also provided insights about the future of the electric car industry to justify your analysis. I respectfully disagree with your thesis and I believe its sending the wrong message to potential investors. The main reason investors are staying away from Tesla is valuation based, not because they don’t understand electric cars. Most people don’t even understand how a gasoline car works but as long as the car gets them from point A to point B that’s sufficient. I could write a similar article titled “Invest in GM because most investors don’t understand a piston-timing system”. Comedy aside, understanding electric cars is not the reason people invest or don’t invest in Tesla. The point of the article is to address the risks associated with Tesla and to educate the reader.