Tesla FUD: I Was Wrong
Credit to Author: Frugal Moogal| Date: Mon, 07 Oct 2019 16:03:12 +0000
Published on October 7th, 2019 | by Frugal Moogal
October 7th, 2019 by Frugal Moogal
The goal of this series is to examine current topics being written about Tesla [TSLA] that appear to be stirring up “Fear, Uncertainty, and Doubt” (or FUD). The plan is to try to provide reasonable analysis about the validity of the claims. I generally do not link to the articles that “inspire” me to write this, as I do not wish to reward analysis I feel is poor with increased traffic. However, I will freely admit that my analysis may contain incorrect assumptions, and will do my best to acknowledge them in future articles.
A while ago, I started a semi-regular series in which I examined specific cases of Tesla FUD (or “Fear, Uncertainty, and Doubt”). The plan was that I would look at a FUD topic that it seemed a ton of stock analysts were suddenly communicating about Tesla. The idea began because in my regular check-ins about how Tesla was doing, I would often find my newsfeed dominated by a bunch of writers claiming the same basic idea, and how that idea showed that Tesla was in big trouble.
The topics I chose were things that I felt were obvious but analysts didn’t see, which I found stunning. I also did write one article explaining why I felt that Tesla was a risky stock choice.
I haven’t kept up with the FUD as much as I had expected, at first because my personal life got incredibly busy, but lately because I haven’t seen the same rate of articles seemingly all focused on singular topics, and even when that happens, as in the case of the Smart Summon topic I recently covered, the articles aren’t directly discussing the impact that this would have on the stock price.
Recently, though, I have realized I made an error in those articles, one I wasn’t expecting. Before I get to that, I always put a bit of a boilerplate on my articles so people know where I’m coming from, so here we go:
“I remain a Tesla shareholder with 8 shares, with no intention to add to or sell that stake. I’ve mentioned in the past I think Tesla remains a risky stock, but one that I still believe has the potential to increase astronomically in the future, which is why I continue to hold a limited number of shares. I would not suggest anyone use the following article as their sole data point to decide to invest nor sell shares in Tesla.”
Let’s just get right to it. My boilerplate no longer applies, and in fact is wrong. As of this past Friday, I have added 7 additional shares to my stock portfolio, and I now own 15 total shares, worth as I type this Sunday night a total of $3,471.45. It’s by no means a huge position, and I do still think it’s somewhat risky, but I think there have been a ton of positive developments lately. Instead of going super deep into any of them, I am going to give you a quick bullet-point list of certain matters and how I interpret that data, which led me to my decision.
I would also caution you that I’m a voice on the internet writing behind a pseudonym. When you see that, it should be a red flag to independently verify the information in the article for yourself, as I could really be secretly holding 10,000 shares I’m hoping to bump up in price today to sell higher. I’m not, but I don’t have a way of proving that to you — and I suggest keeping that skepticism for all articles you read. I know I do.
Here’s what I see:
On top of this, Tesla has potential positives via its new insurance option, the new Tesla Solar rental program, and its pickup truck to really move on tons of different fronts.
When I wrote the article in June, almost everything above hadn’t happened, or wasn’t as clear as it was now that it was happening. The vision of Tesla seems to be coming together at a much more rapid pace than what analysts anticipated, and I expect further great news for the company on at least one or two major items on their upcoming earnings call.
I’ll also point out that I didn’t address a number of things in this article. I’m not expecting to see huge profitability this quarter. I’m not expecting to see a vastly increased margin on their vehicles. And I’m okay with that. If I get time, I’ll write a follow-up article on why those particular items concern me less today than they did even 4 months ago.
Maybe I’m right, and maybe I took a gamble that won’t pay off … but in future articles I may have to change what I write in my boilerplate, because if the share price remains similar to what it is now for long, I will definitely consider adding to my position in the near term.
Frugal Moogal A businessman first, the Frugal Moogal looks at EVs from the perspective of a business. Having worked in multiple industries and in roles that managed significant money, he believes that the way to convince people that the EV revolution is here is by looking at the vehicles like a business would.