Discover how a £150 investment in Tesla stock five years ago could now be worth £966, outperforming major market indexes like the S&P 500 and FTSE 100.
When it comes to thrilling stock stories, Tesla (NASDAQ: TSLA) sits at the top. Whether you believe it’s one of the most impressive success stories of our time or just an “overpriced carmaker,” there’s no denying that Tesla’s stock journey has been full of action, surprises, and incredible growth.
Personally, I’d love to own Tesla shares but only if the price is right. The company has built a strong brand, has millions of loyal customers, and continues to push the limits of innovation faster than most others. But before we talk about where Tesla might go next, let’s rewind and see just how far it’s come.
A £150 Investment That Grew by 544%
One important point: Tesla doesn’t pay dividends. So, if someone had put £150 into Tesla stock five years ago, they wouldn’t have received any regular payouts.
But here’s the exciting part: investment would have grown by 544%.
That means your £150 would now be worth £966.
It’s not going to buy you a private jet or a yacht. But turning £150 into nearly four figures in five years? That’s definitely worth getting excited about.
Tesla Beat the S&P 500 and the FTSE 100
To see how strong this performance really is, let’s compare it to major market indexes. In the same five-year period, the S&P 500 went up 94% already more than double what the FTSE 100 achieved.
And still, Tesla left both of them in the dust. That’s the kind of explosive return only a few stocks ever manage.
Don’t Fall for the “Past Equals Future” Trap
These gains have been amazing no doubt. But here’s a mistake many investors make (and I’ve made it too): they think just because a stock did well in the past, it will keep doing the same in the future.
Sadly, things rarely work that way.
Tesla stock has been very unpredictable lately. It doubled over the past year, but since December, it has fallen by around 25%.
Why I’m Not Buying Tesla Right Now
The reasons behind Tesla’s huge growth over the last five years may not apply anymore.
For example, sales dropped slightly last year, and that decline got worse in the first quarter of this year. The electric vehicle (EV) industry is still growing, but the competition is now fiercer than ever. And when that happens, profits can take a hit.
Cool Ideas, But Still Waiting for Big Results
Tesla is also working on some exciting projects, things like driverless taxis and robotics. These could completely change the future. But for now, only one part of the company, the power storage business, is showing strong and steady growth.
Until these other ideas start making real money, I’m staying cautious.
A “Ludicrously High” Price Tag
And here’s something I can’t ignore: Tesla’s current price-to-earnings (P/E) ratio is 197. To me, that number is “ludicrously high.”
It’s just too expensive for what it’s delivering right now so I’m not buying the stock at this stage.
An Amazing Journey But Timing Matters
There’s no doubt that Tesla has had a fantastic past, and the future could still be full of innovation and growth.
But when it comes to smart investing, timing is everything.
Right now, I’m happy to wait and watch from the sidelines.
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