Why I Think Tesla Motors Inc (TSLA) Is a Terrible Investment

Warren Buffet’s Berkshire Hathaway owns a 10% stake in the company. Buffett describes the company as young and promising. Buffett’s partner in crime, Charlie Munger, has described BYD CEO Wang Chuan-Fu as a combination of Thomas Edison and Jack Welch.

Warren and Charlie see a great CEO in Wang Chuan-Fu, the American public sees a great CEO in Elon Musk. The better track record when it comes to investing belongs to the former party.

Final quotes from Ben Graham

Ben Graham is the greatest teacher that the investing world has ever seen. Here is one quote from the “Intelligent Investor” that relate perfectly to Tesla Motors Inc (NASDAQ:TSLA).

“For 99 issues out of 100 we could say that at some price they are cheap enough to buy and at some other price they would be so dear that they should be sold. The habit of relating what is paid to what is being offered is an invaluable trait in investment.”

An investment in Tesla must be the result of a logical analysis of facts, and nothing else. The technology for purely electronic vehicles is still in its infancy, and yet many people act like Tesla is a surefire winner. At this state, and at these prices, Tesla is a massive speculative gamble. If you want to speculate on the future of electric cars, I suggest BYD, a smaller company with more upside potential. For these reasons, I strongly discourage making any investment in Tesla Motors Inc (NASDAQ:TSLA) at this time.

The article Why I Think Tesla Is a Terrible Investment originally appeared on Fool.com and is written by Ryan Palmer.

Ryan Palmer has no position in any stocks mentioned. The Motley Fool recommends Tesla Motors . The Motley Fool owns shares of Tesla Motors. Ryan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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