Page 146 - MS Year in Review 2020

Some other possible explanations for Market Madness and S & P Committee Myopia

are:

 Could Elon Musk be a master magician and creating a spell over the market

and the

S & P Committee?

 Could it be a consequence of Covid-19?
 Could it be a Machiavellian ploy by the US Government?
 Could it be all of the above?

A Machiavellian Ploy by the US Government?

Could it be that the US Government has decided that Tesla is “too important to
fail”??? Are they so committed to a zero-carbon future that all electric cars are a
Musk—sorry, I mean Must!

Humm. Don’t know yet.

THE BOTTOM LINE?

So, the answer to the question “why Was Tesla Added to the S& P 500"? is simply
not clear.

Tesla has yet to demonstrate (prove) that it is a sustainably successful,
profitable company. Yet Mr. market has decided to continue to purchase its

stock at a current PE ratio (as of Friday November 20) of about 936! That is
Nine hundred and Thirty-Six!

PE ‘Shmee-he’. Some years ago, when I was trying to coach my brother on stock
investing and he wanted to buy Coca-Cola which then had a PE of about 60, he

said, memorably: “PE ‘Shmee-he.’ I’m buying it.” For full disclosure, my brother

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