Here’s why I love Tesla…but would never buy $TSLA – March 15, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I want to talk about Tesla ( NASDAQ: TSLA ) today.
My wife and I own a Tesla ( NASDAQ: TSLA ) Model X and we love it. It’s the one with those falcon wing doors, which are cool unless you are trying to open them in the garage. It is also a commuter car. This means we’re not going to drive it cross country because of the charging issue, and that’s a now issue, that’s a right now issue. I’m talking about driving right now, not what’s going to happen in 5 or 10 years.
What I’m saying is, as far as consumers go, consumers buy what they can use now. They don’t plan for a rainy day unless they’re buying an umbrella on sale in August. We like our Tesla ( NASDAQ: TSLA ) but we use it as a commuter car because that’s what works for us. We will not buy the car when the lease is over, you’re not even allowed to, per the terms of the lease agreement with Tesla ( NASDAQ: TSLA ), you have to give up the car.
If you want to buy another one, that’s fine. But you can’t say, what’s a residual on this, I’d like to buy that. I’m going on, to make a point here. We wouldn’t want to do that anyway because those batteries do have shelf lives, they have “use-by dates.”Now, as a commuter car, our battery is probably going to go for a long time.
But I know this, when it does come time to replace the battery, it’s going to take tens of thousands of dollars in order to replace that battery. You’re essentially replacing the guts of the car. So in light of that, it’s not really a practical car for most people to own, certainly not the Model X. I think the Model 3 is a lot cheaper, it getting cheaper all the time, by the way.
Elon has even said that we need to anticipate slower growth, lower prices, and all that. So he’s been talking down the fortunes of the company, even though Tesla ( NASDAQ: TSLA ) cars, I think they’re awesome, I think they’re great, but he hasn’t exactly been saying, “It’s going to be awesome, you’ve got to buy, you’ve got to get a Tesla ( NASDAQ: TSLA ).” He’s even been talking down his own company.
This is the point that I want to make on this, this is not a stock that you want to buy, not by any stretch of the imagination. As I understand it, I don’t really follow her, but as I understand it, Cathie Woods, for her Arc, has been buying Tesla ( NASDAQ: TSLA ) all the way down. The best thing that I could say about her is, the thing that Cramer described her as a couple of years ago, “Yeah, Cathie Woods trades like she just started.”
This is a great example of this, let me show you on Market Surge, it’s MarketSmith but it’s the new MarketSurge. This green line here with the hash marks, that’s their earnings. This is a weekly timeframe, and if you look at where the price peaked, which was back here in late 2021, it started moving lower from there.
At the same time, earnings continued up, and up, and up, and didn’t peak until there. The stock had already fallen quite a bit, while earnings were still moving higher. And then ultimately now they’re moving lower. Here’s why I’m showing you this, because if all you’re looking at are numbers. If all you’re looking at are earnings, and just assuming that the stock’s going to take care of itself. You’re not going to do very well at turns.
While earnings are good, the charts good, everything is good, everybody’s brilliant and all that, fine. But at turning points, as we’ve seen with Tesla ( NASDAQ: TSLA ), you will totally miss out on this process of a top. And tops are processes, they’re not events. What I’m doing here is, I’m pointing out to you how a stock will anticipate a change in fortunes, even before it becomes apparent.
You have to look at a chart and use that as your windshield (pardon the pun, since I’m talking about cars). Look through the windshield of the chart in order to see what’s on the horizon in front of you. If you had done that, you would have seen a definitely clearer picture of Tesla ( NASDAQ: TSLA ).
As I look at this ( NYSEARCA: ARKK ), that doesn’t surprise me, not really very much at all. So stay away from Tesla ( NASDAQ: TSLA ), I think it is a good shorting opportunity, I don’t short stocks much anymore because I don’t think there’s that much money in it, frankly. It’s hard to make money on the short side, they tend to be more volatile, and I don’t need the aggravation.
If the stock runs back up to here, let’s say 180.00 or so. And then you look for a little pullback, a little reversal like that, that’s when you want to short the stock. This is making lower highs, and lower lows, you don’t want a part of this, don’t try to catch the bottom, you’re not going to do it. Even if you do wind up buying right at the bottom, don’t you have better things to do with your money, than to sit here and try to fart around with an electric car company? Because guess what? I do.
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