According to Yahoo Finance, TSLA is on a PE of 38 and a market cap of nearly $400b. High PEs are only warranted by high growth, which is difficult for a large company to achieve.<p>The narrative over the last few years is that tech stock will grow to the sky. We were in an ebullient bubble phase. Psychology is a factor in market pricing. The narrative is shifting. Interest rates are going up, the economy is tightening, people may lose their jobs and investors are realising that companies in high valuations leave precious hostages to fortunes. People are beginning to realise that TSLA doesn't have a monopoly on the production of electric vehicles. Above-average profits bring in competitors, which of course reduces those supernormal profits due to market forces.<p>People go from "this baby's going to the moon" to "I don't want to be the last guy holding the bag."<p>They'll be plenty of experienced investors on HN who know exactly how all this goes down. But they'll also be a surprising percentage of HN readers who won't. Despite being highly intelligent, they'll fall for narratives (perhaps even more so than their lesser intelligent counterparts), and rationalise why absurd valuations are justified.<p>Falls tend not to be kind, either. It can take years to build up a head of steam, only for it to collapse in a few months. Crypto, anyone?<p>Rising prices tend to feed on themselves. The higher and longer a stock goes up, the more it seems like a "sure thing". But there's no such thing as a sure thing. The higher it goes, the more detached it becomes from reality. Reality wins in the end, though.