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☕ Tesla: 3-5X in 3-5 years

Oct 02, 2024

Good morning! 👋

All three indices are in the red this morning as I type. Not surprisingly tech stocks are being hit the hardest whilst defense stocks, oil and Treasuries spike.

Absolutely par for the course for three reasons.

Tech stocks are amongst the most highly traded and widely held stocks in the world. They’re also the most liquid so nervous nellies and those with the attention span of a gnat will often sell ‘em first because they know there’s a market.
The greed gland is driving both defense and oil today because investors who have just figured out that the Middle East is serious wanna get on board. That’s great if you’ve been paying attention for the past six months and buying at much lower prices as I’ve repeatedly encouraged during numerous media appearances, presentations and right here.
Treasuries, meanwhile, are a classic safe-haven choice which is why they’re up and yields - which run in the opposite direction - are down.

Do NOT let the chicanery bother you if you can help it.

I wouldn’t be surprised to see some buying and the green that comes with it by the time you read this.

Why?

History shows very clearly that not investing is worse than being invested in markets that stink.

Here’s my playbook.

1 – No, Tesla didn’t miss

Wall Street’s masquerade continues with media outlets like CNBC and others trumpeting the news that Tesla “missed” delivery estimates. (Read)

At the risk of sounding like a broken record, not.

Analysts got it wrong again.

Let’s review

462,890 deliveries for Q3 = best Q3 quarter ever

Marks a return to growth

6.9 GWh energy storage products deployed during the quarter, up 73% YoY

Tesla still sells more battery electric vehicles than any other maker in the US

The charging network is all but a global standard at this point and may contribute as much as $7.4B a year by 2030.

Shares are +32% in Q3 and +71.14% off $142.05 lows set in April 2024.

The bottom line on Tesla is super simple.

Tesla stock has returned 1,418.71% over the past decade despite the naysayers who have effectively said the same thing today for years. The S&P has turned in 192.96% by comparison.

3-5X in 3-5 years.

MyPOV: Anybody who’s still thinking about Tesla as a car company lost the plot a long time ago. And, not for nothing, I think the upcoming Robotaxi reveal may get super interesting, super-fast when people begin to connect the dots. Cars are a tiny part of Tesla’s business model.

2 – Eli Lilly's big bet

Eli Lilly will invest $4.5 billion to build the Lilly Medicine Foundry, the purpose being to streamline drug production. Management wants to pull in $50 billion by 2028 from weight loss drugs alone.

Given the state of humanity and the junk in our food supply I think that’s probably low.

That said, I am watching the growing raft of lawsuits about how drugs like Ozempic and Mounjaro are causing nasty side effects including stomach paralysis and pancreatitis so that does concern me from an investing standpoint.

I have repeatedly suggested throughout this year that pharmaceutical stocks would be a smart place to invest if the rest of the market began to slow down or hit a rocky patch.

That still stands.

If you own Lilly, good on ya!!

3 – Nike: Winning isn’t for everyone 🤦‍♂️

Nike ran a campaign during the 2024 Olympics proclaiming that ‘winning isn’t for everyone.”

Talk about irony.

Yesterday’s earnings were a train wreck and my fears well-founded this past Monday when I cautioned investors to steer clear. (Watch)

I’m astounded Nike is down only 6%!

Adidas continues to be the stronger player in tennie land. But Deckers and ONON could be interesting.

4 – So much for that idea: Bitcoin

One of the fundamental reasons the cryptorotti often give as rationale for owning Bitcoin (and other digital currencies) is that they’re a safe-haven beyond global control or influence.

That may have been true once upon a time, but no longer.

The fact that Bitcoin is dropping on rising Middle East tension ought to be a big wake up call for those paying attention.

The rapid introduction of ETFs, futures and all sorts of other trading instruments combined with a sudden 180 from major trading houses (that used to hate it but now embrace it) means Bitcoin is no different than any other security.

There is no doubt in my mind whatsoever that the world will move to digital currency. Already is, in fact. Bitcoin may or may not make it because the real money – pun intended – is in blockchain and global clearing.

Keith’s Investing Tip: People constantly focus on minutia but in a situation like this one, the strongest returns will come from the biggest names, particularly if they have fortress like balance sheets and other operations capable of offsetting early digital currency innovation.

5 – Your 5 Minute Guide to Hedging

I’m getting a lot of questions about hedging from concerned investors who are anxious to protect their hard-earned portfolios from uncertainty. So, I’ve decided to bring back an ol’ favorite in case it’s helpful.

I wrote the 5 Minute Guide to Hedging during Covid, but it seems to me that you may find it useful today, too.

Please note that you do not need to buy the 5 Minute Guide to Hedging if you are already part of the OBA Family because it’s included in your membership and available in the OBA Portal. But do click here if you’re not and you would like to buy it separately.