If you missed the opportunity to invest in car manufacturer Tesla—and realize the 12, 551% rise in share price since the company’s 2010 IPO, then you’re in good company. This according to a recent article in The Wall Street Journal.
“Tesla only recently stopped being the most-shorted major stock, and only because those betting against it lost too much money,” the article reports, but emphasizes, “Investors can’t afford regret. Every day brings new opportunities to become very rich, most of which we are bound to miss.”
The article outlines the following lessons to be gained from a Tesla miss:
- Long-term investors must be prepared to face others making bigger gains. “The best way to stay sane is to remind yourself that plenty of others are keeping quiet about their big losses.”
- The high share prices of overvalued stocks represents a competitive advantage that attracts more investment dollars, representing “a type of self-fulfilling prophecy.”
- “There is no rule that a highflying stock has to crash to earth any time soon.”
- “A charismatic leader matters,” the article says, noting that neither investors nor customers care that Tesla cars have more quality problems than any other brand and that the company is “decades behind the industry best practice in production.” Their love for the brand blinds them to any deficiencies, it argues.
- “When investors latch on to a trend, it can overpower common sense,” the article says, noting that they want growth, “disruptive innovation,” and “new, green energy,” all requirements met by Tesla.
- Looking for the next Tesla in upcoming IPOs is “likely to lead to disappointment,” since the average IPO since 1980 “barely outperformed over its first three years, and only if the disaster of the dot-com era is excluded.”