How is it possible the market can be so clueless? Don't they want easy money by investing in
Tesla? Well who are the people analyzing Tesla, and investing in the company?
FUND MANAGERS Well we have fund managers, what do they do?
They focus on a portfolio. Hey if I started a fund management of my own, it would be very
basic, just Tesla stock, so there wouldn't be much point in you investing in my fund,
as you can invest in Tesla yourself, without my commission. Although perhaps I could start
a Tesla LEAPS fund, maybe that would be different, but I don't think I could handle the stress
of potentially losing people money. It would probably keep me awake at night. I don't know
how Cathie Wood sleeps at all.
Therefore these fund managers, or ETF managers, have to have a diversified portfolio, of perhaps
even a dozen or so stocks. I probably spend about 60 hrs a week just on Tesla. 12? No
try more like over 100 for Wedbush Securities, or about 30 for Gerber Kawasaki, or 33 for
Gary Black's Future Fund
Or 131 for Ark Invest's ETF holding. Ok we should give Cathie Wood credit though for
being the only analyst remotely close to estimating the success of Tesla, however, that was all
based on Tesla's Robotaxis, Tesla made it much bigger than ARK ever thought, and without
Robotaxis. But she was still a good cheerleader for us back then. She was also a good cheerleader
for Bitcoin too.
Also when these people are talking, they are likely motivated by their self interest too,
they are saying things to boost their portfolio, so they can hit their targets. 79% of fund
managers even under performed the S & P last year. Which is why if you actually want a
diversified fund, it makes sense just putting it into and S & P index. The odds are definitely
against you. I mean you'd think statistically even half would beat the S and P.
Some even have the audacity to think they know how Tesla should be run better than Elon,
despite what little time they concentrate on Tesla relatively. Or they have a better
idea of the EV industry than Elon, an entire industry that Elon pretty much carved out
himself, working over 100 hours a week at times. Yet people who clearly don't understand
the industry as well, say things like Elon should make a regular pick up truck. Despite
the Cybertruck having more per-orders than any other vehicle in history. So be careful
who you listen to, is all I'm saying.
No offense to any of them, they are doing their thing, and offering various ETFs that
certain investors are looking for, and contributing in their own ways. They are successful, and
wealthy, they are even on the mainstream media reporting. They are given a lot of authority.
And hey it's great for us to hear authoritative people talking positively about Tesla, especially
given than they all pretty much have Tesla as their largest holding. But their authority
doesn't give them more credibility than us simple retail investors.
And these are the ones who actually have an invested interest in Tesla, compare that to
a stock analysts who don't own any Tesla at all, yet still give buy or sell ratings. Just
think how little relative research they have done. And have to do this for perhaps 30 or
50 companies. It's almost as irrelevant as a Moodys credit rating, yet people still care.
So how can a fund manager time and effort on a portfolio of 100 stocks and be credible?
Well they hire stock analysts to give them all the information they require. But what
are these analysts doing? Maybe some are actually dedicated to working on Tesla full time. But
these are employees, maybe earning a decent salary, and intelligent with the necessary
qualifications. And their background is finance and economics perhaps. And they went and got
a job at one of these fund management companies, and then got arbitrarily assigned the task
of focusing on Tesla. They work their 40 hours a week or so, or perhaps more, and take breaks,
but they are employees doing a job, with minimal incentive, at least compared to their counterparts.
RETAIL INVESTORS The retail investors. Now who are these people,
what is their interest? They are you and me, people who are absolutely passionate about
the product, company and CEO, who eat up every little bit of information there is. We talk
about it with each other, and share as much information with each other as possible, and
do research in all their areas and love sharing with the rest of the community, even just
to get more likes or followers, not necessarily even monetarily motivated. They just want
their kudos, to be acknowledged in the industry. Do you think the likes of Cathie Wood can
be seen asking us retail investors questions about Tesla? No they have to act as if they
know it all already, they can't be seen as humble. They have to make their investors
think they know everything, have insider information and are confident about all their investments,
in order to get customers.
Hey you'll see me on Twitter happily ask people for more information, because you know what,
I can admit that I was not someone who was simply born with all the answers. And if I
see someone more credible than me on a topic, I am going to ask them about things I don't
know. Same with comments on YouTube, you will see me interact with many of you there too.
For example, I don't know the most about batteries in the world, but I am always keen too know
more.
RESEARCH However, some retail investors actually do
so much work on researching Tesla that they are able to afford to it full time, as they
have so many followers, or Patreon supporters, and it is so encouraging and motivating for
them, that they can't stop, and like I said it's their passion. What is a Tesla stock
analyst doing for a fund manager? The boring usual stuff. Whereas our community are always
trying to look at new angles, outside the box, and due to it being such a great community
we can talk to real specialists, who have the same passion as us, except in their specialized
field. Like AI specialists, who are just so passionate and amazed by Tesla's AI technology.
Or a battery specialists who are just to amazed by Tesla's battery technology and expertise.
Or car manufacturing specialists who are just so amazed by Tesla's car manufacturing and
productivity. Or economist specialists who are so amazed by Tesla's sheer economics and
potential finances.
Not only that, a lot of these passionate fanboys, if you like, well they really, really believe
in what they are seeing in their research, so much so, that they are also all in on Tesla
stock. Which means they also have plenty of skin in the game. Compared to a stock analyst
employee, who likely doesn't have enough invested that they will likely be able to retire in
the next few years if Tesla triples. Their job is to find ways of valuing Tesla for the
investors in the fund, to make it look attractive to invest in said fund, not Tesla the company
itself. It's marketing.
These analysts cannot compete with Tesla retail investors. And sure there were a lot of investors
in Apple, passionate about the company, and the visionary leader. But come on, it's not
anywhere near as exciting as the mission that Tesla is pursuing. The company that revolutionize
the world to levels that were previously unimaginable. Making the world much more lower cost with
more affordable transportation. Reducing pollution, reversing potential climate change, and creating
a sustainable world for future generations. Oh yea, and doing this by inventing some absolutely
insanely fun products, like the quickest cars in the world.
ARROGANT Are we arrogant to think we know better than
these people, hey they go on national TV, wear expensive suits and some are even billionaires.
Who are us mere mortals in comparison? We are the heart of the investment community.
We have a secret, we know Tesla will be big. Although we are happy to share this secret
with whomever will listen to us. We try not to be too complacent either, we don't laugh
and mock bears who have any counter-arguments, we talk with them, hear them out. We are somewhat
of the mindset that this is almost too good to be true. This seems like too easy money.
If it was this good, then wouldn't Warren Buffet invest too? Why would the almighty
Bill Gates short Tesla? What do these richest men in the world know that we don't?
But we band together, and look at it all together, and come to the same conclusion. We know something
they don't, or perhaps we just understand it different, maybe our brains are just wired
different. We seem to have similar sense of humors, perhaps its our personality types.
However, we can just layout it very simple. Tesla has a ton of demand. Tesla are expanding
production to try and cater to this demand. Tesla has a massive profit margin. Tesla is
reducing production costs continually. Tesla has no competition. Therefore Tesla can maintain
said margins, or even worse case scenario drop them slightly to increase demand if necessary
for further expansion, but still remain highly profitable, yet further increasing economies
of scale. This expansion will only add further to profits. And the expansion is not going
to stop for sometime. Even if Tesla is thought of as a luxury brand, then don't you think
it will still beat the likes of BMW or Mercedes on sales, perhaps at least 3 or 4 million
sales a year? That's enough alone to double the stock price with a low p/e ratio.
Then we think about the energy business, which is a license to print a product that saves
people money. It's purely a product that offers anyone who buys it a 25% return on investment
or so.
All of this builds up further passion, which adds to motivation, and collective knowledge
in all areas of the business. For example, look how much we know about how batteries
work. Well iPhones have batteries in them too. Do you think the typical Apple investor
even knows what a cathode or anode is? Let alone how the actual electrons pass through,
or how the lithium is refined. This community cares about every single in-depth element
of Tesla to an almost absurd level, yet we can't get enough of it.
Do you think all these bears who doubt Tesla have been anywhere near this deep into analyzing
the company. No it's the bulls, especially with millions of dollars invested. They can
justify the effort, and with that much skin in the game it's a lot more exciting. When
Tesla's stock price doubles, they get a lot bigger bonuses than some stock analyst, who
might just end up with a promotion if lucky. Whereas we end up with a pretty sweet early
retirement.
STOCK PRICE But the problem is, a lot of retail investors
still measure their success in the actual stock price. The stock price gets very confused,
especially for all the reasons I have mentioned. Then it gets even more distracted by the media.
The mainstream media is incredibly inaccurate on how they report Tesla. They are doing what
they can to get clicks. If a fund managed with millions or even billions invested in
Tesla, doesn't understand the stock as well as, then do you think a reporter will, do
you think they even care? And then people who read said articles, will love to tell
you how bad Tesla is doing, or how crazy the CEO is in charge of your retirement.
They almost take pleasure in telling you what is actually happening with Tesla, as they
heard it reported by a talking head on national TV, and who are you to think you know any
better. Of course I myself have had many instances of this, and you can likely only imagine the
look on these people's faces after I have explained to them what's actually going on.
They tend not to have much to say after that. It's not their research, they are just parrots.
Don't let anyone distract you from your conviction.
One of my wife's cousins is high up in JP Morgan, and he was telling me that Tesla is
going bankrupt, this is when Tesla was the equivalent of $16 post split prices. I heard
out all his reasons, and they were wrong. My wife's uncle too, a reputable economist
on the board of a few companies. I picked him up from the airport one time, and heard
out his opinion on Tesla. Tesla doesn't have demand, they don't make profits without regulatory
credits. Admittedly, by the time we reached his destination, he had certainly changed
his tune.
I am just like most of you, except I likely have a lot more time to invest into researching
Tesla. I do whatever I can to remain objective, I think there is a good chance that may not
be 100% possible. I am still content with this as a great investment even if dry battery
electrodes don't work, or FSD never happens. I am not gambling on those having to happen.
But if they do, one of them will triple the stock price, and the other will add a 0 on
the end. So it's certainly nice to have that hope still. It's like the lottery ticket that
never expires.
Anyway, its like I say, take truth as authority not authority as truth.