Despite some recent hiccups, Tesla’s stock has had an unusual month, including a flawed release of its driver-assistance software. Besides that, there was confusion around Hertz whether it signed for a deal with Tesla to purchase 100,000 vehicles.
The shares of Tesla have been up more than 51% since the beginning of the last month. Therefore, the company’s market cap has increased to more than $1.3 trillion. Last year, it only managed to pass the automaker – Toyota, now the second-largest in terms of market cap. However, it is now almost $900 billion more valuable. Experts, including Jim Cramer from CNBC, have described the Tesla stock as rising endlessly on nothing.
According to CNBC calculations made Wednesday, if you had invested in Tesla stock in November 2020 (worth just over $400 a share), you would have almost tripled your investments. For example, an investment worth $1,000 in November last year would be worth around $2,950 this year, representing a return of about 193%.
If we go back several more years and analyze the possible profit, we see that the return is even greater. For example, five years ago, in November, Tesla was trading at around $39 per share. A $1,000 investment then would have increased 3,026% and be worth around $31,287 as of Wednesday this year. Over the same period, the S&P 500 index would have given you a 142.5% return.
If you had invested in Tesla 10 years ago, you would have a five-figure profit. A $1,000 investment in Tesla ten years ago in November would be worth just over $205,000 this November, with the stock’s price rising from $5.75 to $1,228 over these years. The outcome is worth more than a 20,000% return. If you have invested similarly in the S&P 500, it would have given you a 357.5% return. However, this doesn’t mean that it is not worth investing in the S&P.
Over those ten years, Tesla has been selling just the Roadster (offering the Models S, 3, X, and Y). The company has also announced Tesla Semi and the Cybertruck while being noncommittal about launch dates for these vehicles.
Most experts, including Warren Buffett, say the S&P 500 is the best place for most people to invest because it makes every stock automatically diversified.
Despite Tesla’s extensive stock growth, any individual stock can vary in performance, and past returns can not always predict future outcomes.
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