I believe people need to rethink their "just buy the S&P and forget it" attitudes. With Teslas inclusion and enormous market cap, it now has a profound effect on the index. Tesla has surpassed Walmart and Berkshire in market cap. Think about that. A company that has to sell shares, borrow money, and requires credits to be profitable is now the 6th largest company in the S&P. Berkshire is buying shares, Tesla is selling them because they need money. Their market cap is $100 billion more than Walmart. Tesla had $24b in revenue all of last year. Walmart had $134b in revenue last quarter alone. Walmart owns $200b in real estate while Tesla cant even pay rent on time. Since that announcement the stock is up 35% and it hasn't even been added yet. More downside risk. I'm a fan of Tesla and I made a decent amount of money on their epic run but being the 6th largest company in the index opens up massive downside peril for passive funds. The entire EV market is in a state of euphoria and failure to meet unrealistic expectations will be met with dire ramifications for shareholders. Unfortunately that now includes holders of SPY and VOO.
Submitted November 25, 2020 at 07:20PM by Blackops_21 https://ift.tt/2HCCKbj
