*This whole brokerage reports biz is such a big stock market scam nobody talks about 📛📛* In the latest such instance, US-based brokerage called RBC Capital has come out with a very bullish report on Elon Musk’s Tesla. And this brokerage has valued Tesla's completely idea-stage robotaxi business idea at a staggering $879 billion based on a 2040 revenue forecast. *How?* They're projecting future revenue decades away, slapping a 10 times multiple on it like some magical wand, and then discounting it back at a 7.5% rate to today. I’ll be maintaining my grace if I call this preposterous hyper-astronomical BS. .. *And this is a widespread scam across brokerages worldwide, including those that operate in Indian stock markets.* So many instances, where they tell you share price targets for 2030, 2035, or even beyond, with the same reckless abandon for reality. Let me illustrate with a recent example. .. *In Sep, Goldman Sachs & Bank of America had released very bullish research reports which gave Ola Electric a target of Rs 160 and Rs 145 respectively.* On what basis? A guesstimate basis which they had managed to project 1> How many of Ola’s present-day and future scooter models, and the yet to be launched motorcycles and auto rickshaws and cars will continue to sell every year till FY30 2> At what price points and margins these will be sold, and with what subsidy support from the Govt (if any at all by that year) *Using those guesstimates, the analysts involved had gone as far as to say that Ola Electric would:* 1> EBITDA breakeven by FY27 2> Hit EBITDA margin of 12% by FY30 3> Be free cash flow breakeven by FY30 4> Deliver return on invested capital (ROIC) of 27% 5> And achieve a revenue growth of over 40% CAGR from FY24 to FY30 .. *These brokerages conjure up numbers out of thin air, completely disregarding geopolitical shifts, domestic policy changes, or even the potential obsolescence of the technology they're betting on.* What if there's a global economic downturn? Or what if a breakthrough technology renders these vehicles obsolete? These projections are dangerously delusional. -> And of course, they discount the endless things that could go wrong with the business itself in so many years ahead -> It's like predicting the weather for next month based on today's sunshine -> They are literally rigging the markets, pumping and dumping stocks And the sad part is, there are no repercussions. .. *My CC Referrals:* - Plat Metal: https://americanexpress.com/en-in/referral/platinum?ref=jAYANMH2H5&XL=MIANS - Plat Reserve: https://americanexpress.com/en-in/referral/platinum-reserve?ref=jAYANMu0C1&XL=MIANS *Check my work with:* - 3.2k+ on Decoding The Dragon (https://t.ly/chnwj) - 2.8k+ on Deepdives with Jay (https://t.ly/dwj) - 2.3k+ on BharatNama (https://t.ly/bwj) Best, Jayant Shilanjan Mundhra