Tesla (TSLA) a perfect example of why Warren Buffett advises against investing in IPOs. Tesla hasn't made any money; they are losing money. But yet the market is valuing the company at around $30 Billion. Would you buy a company that doesn't make any profit for $30 Billion? Common sense would tell you, if it isn't worth it to buy the entire company as a whole, you shouldn't even buy one share.

Netflix (NFLX) is another company that is over-hyped, over-valued, and just plain old expensive. The company's Market Capitalization is over $40 Billion, but yet they only made $266 Million in Net Income. If we were to invest $40 Billion to buy this company and only earn $266 Million that would place or Rate at 0.665%. We could get a better Rate on a Municipal Bond currently at 3.13%.