Yesterday, one thing dominated my inbox.
It wasn't the Fed releasing inflation numbers.
It wasn't Shopify flip-flopping from $110 to $145 and back down to $120.
It was the cow.
The responses poured in faster than Jasper destroys my socks…
Some of you insisted I'd been absolutely fleeced (pun intended).
Others wanted full forensics…
Brand? Material composition? Purchase location?
One person asked for photos to conduct their own independent valuation.
And my personal favorite... three separate people asked if the cow would be making a guest appearance at Investormania.
(For the record - it’s under consideration. Ivy's attachment to it is growing by the day, so we'll have to see if she's willing to loan it out for the conference.)
What’s funny about this…
You all proved my point!
Every single one of you looked at the same information and came to wildly different conclusions about value.
Some of you saw £1.50 as highway robbery for second-hand children's toys.
Others thought it was a reasonable price for something that would bring joy to an 18-month-old.
A few contrarians even suggested I got a bargain (my wife is furious about this faction).
Nobody could agree.
Which brings us to today's bovine deep dive...
Because if we can't agree on a stuffed cow with observable qualities (size, condition, material, comparable prices at other charity shops)
What chance do we have with something like Tesla?
A cow you can hold… you can inspect the stitching... you can compare it to the other toys.
Tesla? You're valuing future earnings you can't see, in markets that don't exist yet… based on technology still being developed.
At least with the cow, we all had the same information.
With stocks, we don't even have that luxury.
One analyst thinks Tesla will dominate autonomous driving and projects 30% annual growth.
Another thinks they'll face brutal competition and models 5% growth.
Same company. Completely different futures.
The Tesla bull isn't delusional. The Tesla bear isn't stupid.
They just see different cows.
And here's the thing that gets me...
Both bulls and bears will use the exact same valuation method (DCF) and arrive at numbers that are 200% apart.
They'll both sound incredibly confident… they'll both have spreadsheets.
But strip away the jargon, and they're just two people staring at a cow and seeing different things.
The market isn't some mathematical truth machine.
It's millions of people having the cow debate every single second.
Some people looked at Nvidia at $60 at the start of 2024 and thought it was expensive.
It’s up another 3x since then.
Were they wrong? Or did they just have different assumptions about the future?
Here's what I think...
The sooner you accept that valuation is subjective, the better investor you'll become.
That's it
Oliver