🔵 Get My FREE Investing Guide! 👉 http://bit.ly/3c90WyY In this video I'll explain why Jeremy from Financial Education is wrong about Tesla stock and the HUGE difference between Tesla now and Amazon back in 2008. I go in depth on this video so make sure to watch all the way through to get a REAL understanding on what makes Tesla different from Amazon before they went up 28x. 📲 DM me on Instagram // https://bit.ly/3i9PR16 ❤️ Support my channel on Patreon // https://bit.ly/2zHaKiz 💰Get 2 free stocks on Webull! // http://bit.ly/2OWSIxz 💸 Get a free stock on Robinhood! // https://bit.ly/2XezYy2 💵 Mine the next big cryptocurrency for free // https://bit.ly/2M8uhez 🔒 Get Life Insurance in 5 minutes // https://bit.ly/2ZO0TT2 So here's the deal. Jeremy from financial education is obsessed with Tesla stock and is convinced that almost everyone will drive a Tesla in the next 5 years. In the video I am referencing he says that Tesla is not a bubble stock, but that you need to think of the growth and compares Tesla now in 2020 to what Amazon stock was back in 2008. Amazon stock has gone up 28x since this time, and so many use this argument that since amazon has always had a p/e ratio of 100 or more, that Tesla is in the same boat. Here I will show you why that is not the case. When you try to find what a stock is worth you have to tie the share price movement to SOMETHING. It seems like for Tesla stock the only thing that matters to them is number of car deliveries, which just tells me that Tesla is still in a stage of infancy where something as trivial as car deliveries can make the stock pop 20%. But with all stocks there is some fundamental that is driving the stock price. When you take a look at Amazon stock, the p/e ratio is always extremely high... so that's not it. But when you do further research it is clear that Amazon stock price moves in respect to its OPERATING CASH FLOWS. This makes sense since Amazon and Jeff Bezos always say they are not concerned about earnings since they are going all out on reinvesting back into the business to grow as fast as possible. But investors being concerned about cash flows makes sense, because it doesn't matter how much Amazon is reinvesting, they need to show they can bring in more and more cash each and every year. But taking a look at Amazon in 2008, they already had an extensive history of cash flows growing at a VERY FAST rate. So while in 2008 Amazon's p/e ratio may have been 50-100, you could have picked up Amazon stock for only 11 times cash flows from operations (they are around 50 times now), when they had solid proof that they can make more and more cash each year for the past 6 years. When you look at things this way Amazon didn't look so expensive back then after all. It all depends on what metric you use to value the company, and something like simple earnings doesn't make much sense to apply to a company like Amazon. So now here is the difference between Tesla and Amazon. While in 2008 Amazon had a history of 6 years of growing cash, Tesla has only been positive for cash flows for the past 2 years. This is not a big enough sample size for me to be confident in their ability to continue to grow at this fast of a pace for an extended period of time. The second problem is Tesla's valuation. While after 6 years of cash flow growth you could buy Amazon for 11x operating cash, after only 2 years of positive operating cash Tesla has BALLOONED to over 80 times operating cash flows. This doesn't give you the chance you had with amazon to buy at an attractive valuation after already seeing proof that Amazon had a sustainable business model. So While Tesla could in ways be similar to Amazon in 2003-2004, the valuation is so crazy it doesn't make sense to invest at this price regardless of the growth in the future. The fact is that Tesla investors are only investing based on hope, not history. This is not a good way to invest and throughout history usually results in people losing a lot of money. TIMESTAMPS: 00:00 Tesla Stock IS NOT like Amazon Stock 0:33 What Jeremy thinks about Tesla stock 2:24 Amazon Stock 6:10 Tesla Stock #investingclub #financialeducation #teslastock DISCLAIMER: All information and data on my YouTube Channel, blog, email newsletters, white papers, Excel files, and other materials is solely for informational purposes. I make no representations as to the accuracy, completeness, suitability or validity of any information. Because the information herein is based on my personal opinion and experience, it should not be considered professional financial investment advice or tax advice. The ideas and strategies that I provide should never be used without first assessing your own personal/financial situation, or without consulting a financial and/or tax professional.