What to Expect When Market Valuations Reset

I have been consistently warning about the growing bubble in the US equity markets, and the extreme overvaluation of the Magnificent Seven.

What to Expect When Market Valuations Reset

As my regular readers know, I have been a long-term bear on Tesla stock. On August 8th of 2023, for example, I said that I had gone short Tesla when it was trading around $251.50. My bearishness, however, goes back way before then. Towards the end of 2020, when Tesla had a market cap of $639 billion, I wrote about the insane overvaluation of this stock. Its revenues for the prior year only totaled $28 billion, while at the same time, Volkswagen, General Motors, Ford, BMW, Daimler, and Toyota had a combined market cap of approximately $530 billion!! The combined revenues of these six companies in the prior year totaled $869 billion. The numbers just didn’t make any sense.

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