Summary:Investing in non-linear stocks like Tesla $Tesla (TSLA.US)$is about predicting non-linear effects. An effective method is drawing analogies from other non-linear scenarios, especially those that are broad in scope and diverse in nature.
Thus, this article aims to analyze the similarities between the current state of electric vehicle batteries and the QWERTY keyboard in the typewriter industry.
The lack of standardization and the combination of many non-technical factors could lead to a winner-takes-all situation.
Investing in non-linear stocks like Tesla (Nasdaq stock code: TSLA) is about predicting non-linear effects. Investors not only need the ability to foresee the future but also need to do so ahead of the majority.
However, saying it's difficult is an understatement. I've found an effective 'trick' in analyzing non-linear scenarios is drawing analogies from another non-linear scenario. Of course, I didn't invent this trick. Others have discussed it in detail and written books about it. A recent highly readable one is David Epstein's bestseller titled 'Range: Why Generalists Triumph in a Specialized World,' which I personally strongly recommend.
Now, the art of drawing analogies lies within this range (hence the title of Epstein’s book). Drawing analogies from similar scenarios doesn’t help much. We need to draw analogies from scenarios with range. Quoting an example from his book, if you're trying to analyze...