Tesla's Musk summons Warren Buffett logic

Elon Musk, Tesla Motors (TSLA) chief executive, has quoted legendary investor Warren Buffett, suggesting that it is like dealing with a "manic depressive" when handling the stock markets.

"I try to avoid watching the day-to-day share price, because it's somewhat distracting," he told CNBC.

"People try to really read the tea leaves, even though there's really not enough information to make conclusions. And then they'll get exuberant, and then depressed. I mean, as Warren Buffet said, dealing with the market is like dealing with a manic depressive."

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U.S-based electric carmaker has become a Wall Street darling in the past year, surging 344 percent in 2013 as the company announced plans to expand its battery manufacturing capabilities and as its flagship vehicle, the Model S, garnered strong reviews.

However, Tesla has been hit hard in the sharp sell-off in momentum stocks earlier in the year, as investors questioned stock valuations. Its stock price is now down 18 percent from a peak in early March although has still rallied 38 percent his year, with closing price of $208.171 on Friday. Tesla also has a price-to-earnings ratio - an important metric used by traders to gauge valuations - of 100, which compares to around 10 for Ford (F) and GM (GM) and the average 22 on the Nasdaq blue-chip index (.NDX).

Musk, speaking at the U.K. launch of the Model S, said there was a lot of optimism priced into the shares and the company needed to perform very well over the next few years in order to justify that stock price.