Electric Vehicle Stock Investors Should Heed This Lesson From Warren Buffett

. Electric Vehicle Stock Investors Should Heed This Lesson From Warren BuffettWarren Buffett has done a great in the past highlighting the risks of investing in frothy sectors. The lessons apply to investors in stocks like Tesla (NASDAQ:TSLA), NIO (NIO), Fisker (FSR), and Xpeng (XPEV).Every bull market has different themes in regards to technology, demographics, geopolitical considerations, and government policy. However, they do tend to follow the same emotional trajectoryfrom fear to greed. In a way, it’s similar to how every hit song is unique but follows the same general structure in terms of its progressions, chorus, and themes.Bull markets also tend to focus on certain industries that consist of stocks with huge valuations based on projections about future performance and market size. Currently, electric vehicles (EVs) are one such example. Despite the KraneShares Electric Vehicle and Mobility ETF (KARS) being down 20% over the past 2 and a half months, it’s up 150% since the March 2020 lows. Given the industry’s high valuations, it’s not surprising that value investors, like Warren Buffett, aren’t currently interested in investing in EV stocks. Although Buffett hasn’t commented too much on EVs, he did extensively discuss the massive risks of the dot-com bubble in Berkshire Hathaway’s (BRK.B) annual shareholder meeting last weekend. And, there are many similarities between the late 1990’s and now. Thus, I believe investors in stocks like Tesla (TSLA), NIO (NIO), Fisker (FSR), and Xpeng (XPEV) should consider Buffett’s previous insight on the subject.Continue reading on StockNews