Markets can remain irrational a lot longer than you and I can remain solvent.
Re:Tesla Passes Ford by Market Value
by jnicholasp on Tuesday April 04, 2017 @01:30PM
(#14035189)
We could quibble about the meaning of "irrational", but I do agree that markets can be mistaken for longer than most people can financially back their conviction that it's mistaken.
In the case of Tesla vs Ford, there is probably a sense in which the longer the market is 'irrationally' convinced of the value of Tesla, the less irrational it actually is - it's a bet on Tesla's viability and vision, and the longer it seems like a good bet to most people, the more likely it is that it is a rational bet to have made.
I don't know about 'we', but I don't believe in an irrational market - the market may well be wrong, but it's not usually wrong for unreasonable reasons. And potential is all investors ever care about: they're looking to put their money where it has the most potential to turn into more money. Predicting the future is necessarily uncertain and involves ambiguous judgment; you can call that touchy-feely if you want to be dismissive, but there is no such thing as data on things that haven't happened yet.