Tesla Speeds Towards the Crossroads
Amid credit lines and mass furloughs, one electric vehicle-maker continues to defy the common laws of economics. Up 60% in seven sessions, you know it’s Tesla, electrified by a bullish analyst at Credit Suisse.
Dan Levy has upgraded the name from a ‘sell’ to a āhold,ā but he’s also cut its earnings estimates by a quarter, revealing more disconnect between stock and business.
Tesla has four-billion-dollars of other peoplesā money to pay back. Itās all due over the next three years, so forced discounts and fewer deliveries canāt be allowed to persist too long. The company is burning $300 million weekly with Fremont closed, gas is cheap, it canāt make the rent, it’s suspended share buybacks and its furloughed sales reps.
But the analysts have a right of reply. They point to the automotive scoreboard. The company is still ranked first in everything. It has a lead in batteries, its demand from China is resurfacing, and perhaps most importantly, none of its legacy competition can stay in pursuit, as they don’t have access to the same easy funding as Tesla right now.
The coronavirus has given Tesla a very high chance of success, and a very high chance of failure. Elon seems to like it that way. His big promises fuel the cult, and the cult lifts the stock price to levels Tesla can raise even more money.
Heāll need to be careful, though. If Tesla doesnāt use that money to honor rent, customers leasing Model 3ās might follow its lead and decide not to honor their leases.
The Invstr community has been fairly kind so far, awarding the stock 90% positive sentiment compared to 86% for BMW and 89% for Volkswagen. This is going to be a clutch few weeks for the car-maker. If it comes out the other side of lockdown strong, it could have more security, and stock and business could marry up.
Staying Bust During Market Closures
Anyone out there?Ā American markets took the day off on Good Friday, as did many exchanges around the worldĀ on Easter Monday. WithĀ no action on the indices, what’s a trader to do?
Well, out goes the noise. There are no momentary mega-risers or flash crashing mega-fallers to distract you from your investing analyses. Some will hit the Invstr feed with hot topics and questions, how long the rally will run. Others will unplug completely, crunch numbers in silence, and return to markets with conviction next week. One thing’s for certain, now’s the time to extend an advantage over market rivals.
Investing is not a zero-sum game, thereās plenty dollar to go round. However, to make more than the average investor, you need an ‘edge’ that the average investor doesnāt have. You need to know something he or she doesnāt know. You need a stronger gut, more practice, experience, and you need to work harder flat-out.
Most buyers and sellers are active between 9:30 a.m. and 4.00 p.m., official trading hours on the New York Stock Exchange. Others start at 8:00 a.m., catching pre-market, and they donāt go home until the bulk of after-market moves are made at 6.30 p.m. Commendable, but what if they took it a step further.
What if they didnāt take leave on days like today, studied companies at night, and traded them during the day? What if they took investing as seriously as athletes take their training? It wonāt matter what your rivals do in the pre-market if they’re already ten years behind you. Down to business!
