The Long Term Investor

I agree...TSLA shareholders are in for more pain before they see a gain. Much of it is business fundamentals....the rest is the media and other gunning for Musk.

 

This is the story of the markets today.....GASP....earnings actually supposedly making a difference. You know it is a ZERO news day when they are talking about earnings.

Dow rallies 200 points, S&P 500 surges 1% as strong earnings drive gains

https://www.cnbc.com/2024/04/22/stock-market-today-live-updates.html

 

AND....we are closed. A BANNER DAY for investors and the markets. Two in a row.

I am not where I can check my actual returns right now.....(soon)......but..... I know that EVERY stock that I own was solidly in the green today.....even poor APPLE.

Tomorrow is TESLA market day.......with earnings due some time over the next hour. Expectations seem to be.....dismal at best.

 

My stocks gave me a BIG gain today.

ALL were in the green....with NVDA leading the way for full position stocks gaining 3.65% today.....to close at....$824.18....a gain of $29. The "junior" positions also did well with PLTR gaining 3.2% today and SMCI doing a nice 6.25%.

I also beat the SP500 today by 0.91%.

 

HERE are some of the TSLA earnings.

Tesla reports biggest revenue slide since 2012, announces renewed push for affordable model

https://www.cnbc.com/2024/04/23/tesla-tsla-earnings-q1-2024-.html

"Key Points

• Tesla reported a 9% drop in revenue in the first quarter, the steepest year-over-year decline since 2012.
• The company’s stock price is down more than 40% this year as Tesla faces increased competition across the globe.......

• Earnings per share: 45 cents adjusted vs. 51 cents per share expected by LSEG
• Revenue: $21.30 billion vs. $22.15 billion expected by LSEG

Revenue declined from $25.17 billion a year earlier."

MY COMMENT

I am NOT a shareholder so I am not following the stock or the company. I am sure there will be much discussion from now into this evening as to the earnings and the guidance and presentation.

 

TSLA shares are UP.....yes UP....by nearly 6% after hours on their announcement that:

"The company announced it will accelerate production of low-cost models."

In addition all was not bad news:

"The company wrote in a shareholder deck that it’s accelerating the launch of “new vehicles, including more affordable models,” that will “be able to be produced on the same manufacturing lines” as Tesla’s current lineup. Tesla is aiming to “fully utilize” its current production capacity and to achieve “more than 50% growth over 2023 production” before investing in new manufacturing lines.

Revenue in Tesla’s energy division increased 7% to $1.64 billion, while services and other revenue rose 25% to $2.29 billion compared to the same period last year."

https://www.cnbc.com/2024/04/23/tesla-tsla-earnings-q1-2024-.html

 

Here is another take:

Tesla stock surges as EV-maker will 'accelerate' the launch of cheaper cars
New vehicles, including more affordable ones, will leverage Tesla's next-gen platform, Tesla said.

https://finance.yahoo.com/news/tesla-earnings-q1-175358835.html

"investors seemingly cheered the a much-needed update on the EV maker’s current and future prospects as investor sentiment has slid dramatically in 2024.".......

"It appears both a robotaxi and cheaper EV are both on the table for Tesla.".......

"Tesla confirming that the long-awaited next-generation platform would underpin a sub-$30,000 mainstream EV (dubbed the Model 2) is a huge deal for investors, many of whom had seen the low-cost EV as a volume play for Tesla, one that would use a revolutionary “unboxed” production line to make these vehicles cheaply."

MY COMMENT

NEVER....underestimate Elon Musk.

 

OK.....enough for today. Time to feed the dogs.

 

Amazingly TSLA is now UP after hours by......$11.22 or.....7.76%.

Leave it to MUSK to pull this off.......of course....there is no guarantee this will hold till the open tomorrow. I hope it does....I would like to see all the negative BS'ers....fall flat on their face again..... as usual.

 

Nice to see the futures that TSLA was showing last night holding today. I dont own the company but I am a fan of ELON MUSK.

Whatever happens with TSLA long term....he is a proven winner.

 

We all know this......but....for most it is very hard to disconnect.

The News is Making You Miserable

https://awealthofcommonsense.com/2024/04/the-news-is-making-you-miserable/

(BOLD is my opinion OR what I consider important content)

"There was a recent poll about my home state of Michigan where they asked people for their thoughts on the state of the nation’s economy today.

Just 35% of people described the economy as excellent (6%) or good (29%) while 65% described it as either not so good (28%) or poor (37%).

But when asked how they would describe their own personal financial situation these days, a majority of people (61%) described their circumstances as excellent (9%) or good (52%) while 38% described it as either not so good (25%) or poor (13%).

So the prevailing sentiment of this group is: I’m doing just fine thank you very much but the economy stinks.

Kind of a headscratcher, right?

Michigan is not unique in these conflicted feelings. Gallup has a poll that shows people in America are five times as satisfied with their own life than they are with the direction of the country as a whole:


The country is going to hell but everything for me is coming up roses.

It’s a bizarre stance to take.

There are further examples when it comes to this line of thinking:

The education system in this country is failing our children! But my child’s education is pretty good.

This isn’t a new phenomenon but it appears to be getting worse in many cases.

Households have felt strongly about their own financial well-being throughout the challenging pandemic environment but their views on the local and national economies have diverged considerably:


So what’s going on here?

Some of these sentiments are political. Republicans are more positive about the economy when a republican president is running the show and more negative when a democrat is in charge. The same is true for democrats, in reverse order.

Surely, the pandemic and ensuing inflation drove down sentiment.

Then there is the human nature element. People are predisposed to view the rest of the world in a negative light even when they think more positively about themselves.

But I think the biggest reason is the news is making people miserable.

Read a history book or ten. The world has always been a mess. There have always been awful people. There have always been problems.

The difference is now we are constantly reminded of them.

We now get more news in a single day than most people ever saw in their lifetimes just a few short centuries ago.

It started with newspapers, then the radio, and then television. We’ve accelerated the process in recent decades through the Internet, social media, and smartphones.

Our brains aren’t hardwired to have this much information thrown at them. And it’s not simply a case of information overload. It’s the fact that so much of the information we see is negative.

Bad stuff happened in the past at an alarming rate. The difference is our ancestors weren’t inundated with alerts, 24/7 news and social media posts about that bad stuff. They were blissfully ignorant.

It’s impossible to remain blissfully ignorant anymore.

I want to blame the news organizations and social media posters for spreading all of the negativity, but they’re basically just giving us what we want based on our actions.

A recent study looked at more than 370 million stories on the Internet to determine how negative language can impact news consumption. Lo and behold, the more negative the headline, the more likely people are to click on the story, regardless of what the story is about.

You don’t even have to sit through an entire story to be mad now. You can just read a headline or see a screengrab.

Negativity drives eyeballs.

In his book Amusing Ourselves to Death, Neil Postman wrote about what sells when it comes to the consumption of information:

For those who think I am here guilty of hyperbole, I offer the following description of television news by Robert MacNeil, executive editor and co-anchor of the “MacNeil-Lehrer Newshour.” The idea, he writes, “is to keep everything brief, not to strain the attention of anyone but instead to provide constant stimulation through variety, novelty, action, and movement. You are required … to pay attention to no concept, no character, and no problem for more than a few seconds at a time.” He goes on to say that the assumptions controlling a news show are “that bite-sized is best, that complexity must be avoided, that nuances are dispensable, that qualifications impede the simple message, that visual stimulation is a substitute for thought, and that verbal precision is an anachronism.”

It’s worth pointing out this book was published in 1985. Things have only gotten worse.

The sad part about all of the negativity in the world is things are generally getting better over time:


We’ve made a lot of progress as a species. Unfortunately, long-term progress doesn’t make for a clickable headline. People would rather read about the car crash than the family that makes it home safely every night.

Tim Wu wrote about the race to the bottom when it comes to drawing attention to negativity in his book The Attention Merchants:

The only communications truly without influence are those that one learns to ignore or never hears at all; this is why Jacques Ellul argued that it is only the disconnected–rural dwellers or the urban poor–who are truly immune to propaganda, while intellectuals, who read everything, insist on having opinions, and think themselves immune to propaganda are, in fact, easy to manipulate.

Ironically, the people who try to stay informed about everything are the easiest ones to manipulate because they get caught up in a never-ending loop of doom-scrolling.

I’m not suggesting we should ignore all of humanity’s problems. The Internet makes it easier to see all of the bad stuff, but it also makes it more convenient to help needy causes.

But constantly watching the news doesn’t fix anything. It just makes you more negative and depressed about the state of the world.

Go outside. Exercise. Play a sport. Spend time with your family. Watch a movie. Read a book.

Any of these activities are better for you than consuming the news."

MY COMMENT

AND....I will add to the above.....this is nothing new. It has been the norm for many decades in the economic surveys. People answer the survey based on the national news line of the economy. Generally much more negatively than they describe their......OWN....situation. This has been know for a long time.

What is different is that NOW the constant media and social media has made the NEGATIVE rampant. It is there every second of your life. It is constant and relentless. I believe it is significantly changing human behavior and psychological health. It puts people under CONSTANT stress.

In investing....it has the power and does change behavior. I believe it is behind the short term gambling, trading, mentality that is very strong right now. Carried to an extreme....this "stuff" has the power to destroy our stock market system.

 

I like this little article.

Why Do People Make “Bad” Financial Decisions?

https://ofdollarsanddata.com/why-do-people-make-bad-financial-decisions/

(BOLD is my opinion OR what I consider important content)

Recently, the Economist published an article on the economics of American lotteries. In it they found that, if Amercia’s lotteries were a single company, they “would be the ninth-most profitable in the country.” Unfortunately, the bulk of these profits come from some of the poorest people in the United States. As the article states:

In the poorest 1% of zip codes that have lottery retailers, the average American adult spends around $600 a year, or nearly 5% of their income, on tickets. That compares with just $150, or 0.15%, for those in the richest 1% of zip codes. In other words, the poorest households spend roughly 30 times more on lotteries than richer ones, as a share of income.

Historically, I used to think playing the lottery was “stupid” and would often poke fun at people who bought tickets. For example, below are a few of my favorite lottery memes I used to tweet out whenever the Powerball jackpot got high enough:







While I still find humor in these images, I’ve had a change of heart when it comes to how I view those who play the lottery.

My problem was that I was too hyper-rational on the issue. After all, if your chance of winning the lottery basically rounds to zero, why would you play? My belief was that you would be far better off by saving and investing that money instead of spending it on lottery tickets. And, if the typical person who bought lottery tickets followed my advice, they would dramatically improve their financial life.

Unfortunately, my theory was wrong. After running the numbers, I’ve come to realize that foregoing lottery tickets isn’t enough to move the needle for the average American. I can prove it too.

Using the data from the Economist article, we know that the average American living in the poorest 1% of zip codes spends $600 a year, or $50 per month, on lottery tickets. Assuming they bought tickets for 30 years, their total lottery spending would’ve been $18,000. If they had saved that money in cash instead, this means they could’ve had an extra $50 per month for 30 years in retirement. Every foregone lottery ticket is extra spending later.

But that’s the lower bound of what they gave up because they didn’t invest their money. What if they had invested that $50 per month and earned 4% per year (after inflation) instead? In that case, they would’ve ended up with around $35,000 or nearly double the $18,000 they would’ve spent on lottery tickets.

Unfortunately, here’s the bad part—that extra $35,000, if invested at 4% per year, would only generate about $165 per month in additional retirement income. This isn’t nothing, but it’s also not going to dramatically alter their lifestyle. Considering that people in the poorest 1% of zip codes earn about $12,000 per year, an extra $165 per month (or ~$2,000 per year) only equates to a 17% raise in their income (all else equal). And while a 17% raise is nice, it’s not going to change their retirement in any big way.

But you know what would change their financial situation in a big way? Winning the lottery. There’s no debate there. Though the chance of winning is very, very slim, there is at least a chance of a dramatically different financial life. Sacrificing the weekly lottery tickets doesn’t provide that.

This reminds me of the [since deleted] blog post titled Why I Make Terrible Decisions, or, Poverty Thoughts:

I make a lot of poor financial decisions. None of them matter, in the long term. I will never not be poor, so what does it matter if I don’t pay a thing and a half this week instead of just one thing? It’s not like the sacrifice will result in improved circumstances; the thing holding me back isn’t that I blow five bucks at Wendy’s. It’s that now that I have proven that I am a Poor Person that is all that I am or ever will be. It is not worth it to me to live a bleak life devoid of small pleasures so that one day I can make a single large purchase. I will never have large pleasures to hold on to.

From this perspective you can see why some people make seemingly “bad” financial decisions. Because it’s either one of their few joys in life or one of the easiest ways for them to get ahead financially. This explains why financial nihilism has taken off across the U.S. When the cost of living is rising and you feel like you can’t get ahead, sports betting, crypto, and lottery tickets don’t seem like such bad ideas.

But for someone who has their financial life together, such investments can seem downright foolish. For example, imagine a millionaire putting $1,000 into some random altcoin that goes up 100x in a month. How much does that change the millionaire’s lifestyle? Very little. But take someone with only $5,000 to their name and give them a 100x return on a $1,000 investment and their life is transformed.

This single insight explains a lot of the seemingly irrational behaviors we see in the financial world. Once you realize this, it will completely change your perspective on what makes a “good” or “bad” financial decision. Don’t get me wrong, there are people out there who take things too far and have some truly destructive financial behaviors. However, as the data suggests, this isn’t how the typical American behaves, even in the poorest parts of the U.S.

So before you rush to judge someone’s financial behaviors, consider the context a bit more. After all, there’s more to life than money, especially for poor people. Chris Arnade did a great job getting this point across in his book Dignity: Seeking Respect in Back Row America:

Most people didn’t ask for money, even the most desperate. Most just wanted to sit and talk with someone who wasn’t trying to save them, didn’t scold them, and didn’t judge them.

We could all use a little less judgement in our lives, especially around our financial decisions."

MY COMMENT

In my music life I spent much time in the GHETTO. The typical view of people there is totally wrong. I met some of the finest people in my life during those times. My take....BEWARE of STEREOTYPES.

 

The big news today.

Tesla surges after Elon Musk says new affordable EV models coming

https://www.cnbc.com/2024/04/24/tes...usk-says-new-affordable-ev-models-coming.html

 

The market so far today......and....longer term.

Tech Rally Keeps Stocks Afloat as Earnings Roll In

https://finance.yahoo.com/news/asia-stocks-rise-tesla-buoys-225814112.html

(BOLD is my opinion OR what I consider important content)

"(Bloomberg) -- A renewed rally in some of the world’s largest technology companies propped up the US stock market, with traders weighing another big batch of corporate earnings.

Equities edged higher, with Tesla Inc. leading gains in megacaps as chief Elon Musk vowed to launch less-expensive vehicles. Chipmakers also caught a bid on a bullish forecast from Texas Instruments Inc. Later Wednesday, Meta Platforms Inc. is due to report results, and Wall Street will be focused on whether the social-media giant will give any signs of returns from the hefty spending on artificial intelligence.

“Stocks have regained a steadier footing after three weeks of consecutive declines,” said Solita Marcelli at UBS Global Wealth Management. “A strong earnings season looks likely to help restore market confidence.”

An indicator from JPMorgan Chase & Co.’s trading desk that tracks stock allocations reached a threshold typically followed by gains. The US Tactical Positioning Monitor triggered level that shows an “attractive set-up” for S&P 500, according to Andrew Tyler. The equity benchmark gained roughly 3% in the subsequent 20 days after the indicator reached a similar level.

The S&P 500 hovered near 5,080, up for a third straight day. The Philadelphia Stock Exchange Semiconductor Index climbed 2%. Treasury 10-year yields rose six basis points to 4.66% — ahead of a record $70 billion sale of five-year notes.

The yen weakened beyond 155 per dollar for the first time in more than three decades, fueling risk that the key level may prompt Japan to step into the market. Oil fell, though traders kept a close eye on geopolitical risks after Israel said it struck around 40 sites linked to Hezbollah in southern Lebanon.

“If you take a look at what we’ve seen over the first quarter, basically the returns for the S&P are in line with earnings growth,” Katrina Dudley at Franklin Templeton, told Bloomberg Television. “We think that valuations are fair. Therefore, for the S&P to work as we go through the rest of the year, we need to continue to deliver on earnings growth.”

Interest rates staying elevated longer, along with economic uncertainty and geopolitical turmoil have lessened the appeal of some of the stock market’s cheapest strategies.

Investors this month have pulled some $200 million out of value based exchange-traded funds, according to data compiled by Bloomberg Intelligence. In contrast, growth stocks have attracted more than $3 billion in inflows — despite a shaky stock market that’s raised concerns of more downside to come. That diminished interest in cheap stocks comes on the heels of lackluster performances of common value products.""

MY COMMENT

Sounds about right to me.

 

HERO WORSHIP and human behavior fascinate me....thus...this article.

Cathie Wood's Ark Empire Bleeds As Investor Outflows Spike: 'The Loyal Shareholders Have Become Frustrated'

https://finance.yahoo.com/news/cathie-woods-ark-empire-bleeds-192020435.html

 

MORE.....for TSLA owners.

Three Reasons Why Tesla Stock Is Rallying After Q1 Earnings. Elon Musk Issues Criteria For Investors

https://www.investors.com/news/tesla-stock-three-reasons-why-its-rallying-after-earnings/?src=A00220