Tesla reached $547 last week over $200 and 60% higher than on Dec 7, 2019 the day posted TSLA as my 2020 Stock of The Year. This is just the beginning, making today a good time to re-read the case I made for selecting Tesla (TSLA) as, "... my number one stock pick for 2020." So far, so good. Game Changer “‘David and Goliath,' has entered our language as a metaphor for improbable victories by some weak party over someone far stronger…Goliath is much weaker than you think he is, and David has superior technology." – Malcolm Gladwell, author of The Tipping Point. On June 29, 2007 Steve Jobs introduced to the iPhone to the world. It was a seminal achievement in communications, social media and commerce and it went on to reward Apple shareholders with a 1,500% gain over the next 12 years. From its humble beginnings in the late 1980’s Apple has returned 21,150% to its early believers, those who had the vision to invest in the gifted innovation of Steve Jobs. On November 23, 2019 Elon Musk introduced to the Cybertruck to the world. From its unveiling, an estimated two years before full production it is a game changer, not just for pick-up trucks, but for personal and commercial vehicles in a myriad of categories, i.e., the restructuring of global transportation as we know it. Cybertruck represents a tipping point for not just 12+ million light trucks sold a year [2018], but vans (500,000 sold a year in US), autonomous driving, the expansion of rideshare, commercial fleets, local government and the military, all falling within the purview of a cheap, efficient and durable mode of transportation, all at the forefront of a green revolution in the creation and use of energy. Hyperbole? Only if in 2007 the new iPhone was just another cell phone. In the next two years Cybertruck will progress from concept to prototype to orders, to production, revenue, backlogs, and ultimately to profits and shareholder value, all on a relentless continuum that will elevate Tesla’s market cap much the way the iPhone elevated Apple’s market cap. Once it becomes more widely apparent that this product has reshaped the world of transportation, just as iPhone reshaped the world of smartphones, Tesla’s stock price will start reflecting how innovation not only makes the world a better place, but how it enriches the owners of that innovation, in this case the shareholders of the company, those who have the vision to invest in the gifted innovation of Elon Musk. At a share price of $335, with a market cap on $60B, TSLA is embarking upon a multi-year exponential surge in value. Although it is already one of my three top non-biotech stock picks (AAPL and TWLO the other two), it now has virtually unlimited price appreciation potential, so even if you already own shares, it’s time increase exposure on the long side. Tesla’s future is that dynamic, its star shining that brightly, the reward side of the risk:reward equation that substantial. Let me say it another way: I tripled my money in AAPL between 1997-1998 and got out. Had I instead doubled up in 1998, by the time iPhone came out in 2007 my investment would have been up 25X and when iPhone 11 was released, that investment would be up 250X. Now multiply by two because in 1998 I would have doubled up instead of exiting entirely (at split adjusted $1/share). It is 1998 again, only with a different four letters: TSLA. My original TSLA shares were purchased around $100, so like AAPL in 1998 the shares have about has tripled. Fool me once, shame on you, fool me twice, shame on me. There is a collection of links at end of this that sets out the case for a sharply higher stock price. YouTube has hundreds of links to Tesla valuation videos, including a massive collection related just to the Cybertruck. None of them were dispositive on my decision to make TSLA my number one stock pick for 2020. Still, all of them are a part of the dynamic buzz created by this one product introduction. The parallels with iPhone are opportunistically identical. Immediately after the Nov 21st Cybertruck introduction it was almost instantaneously mocked and denigrated by all of the Tesla/Musk haters who were out in full form, virtually dancing in the streets in their orgiastic delight at what they perceived as a Musk/Tesla fiasco. Twenty-four hours later there were 140,000 Cybertruck pre-orders; forty-eight hours 187,000, one week later 250,000. Cybertruck is the tipping point into a future in such a dynamic way that traditional fundamental analysis, just as with the iPhone, cannot even hint at what lies ahead for market cap and share price. Millions viewed that viral introduction video with the two smashed windows and two hundred fifty thousand of us saw enough to pony up deposits to get on the pre-order waiting list. We acted not so much because we loved the looks, or the design, or the staggering technical achievements, but because we got a glimpse of the future in global transportation and we wanted to be a part of it. Putting $100 down on a truck is one way; paying $335 for a share of stock is another, and buying out-of-the money long term calls the most aggressive and passionate way to participate. That is my choice for the best investment and/or trading bet for 2020. They will all pay off, and in ways beyond the pale of our collective imagination. -------------------------------------------------------- Long-Term TSLA Buy Signal: TSLA Jan 2021 $420 Call ($35 = $3,500) Stop: None -------------------------------------------------------- One of the smartest kids on the block is Catherine Wood, CEO of ARK Invest. She is also one of Tesla’s most ardent supporters. In the linked article below she is projecting a $6,000 price target (well below Ron Baron’s $10,000 target). She is accumulating the January 2021 $420 Calls and I have to believe with all of the resources and metrics available to ARK Invest that she didn’t just randomly pick that strike and expiration. Let’s ride her coattails on this one, after all, she did buy AMZN $857 billion dollars of market cap ago: “It was at like a $5-billion market cap. We bought it there and I announced our trade at the weekly general session. People literally laughed.” - C. Wood A Sampling of YouTube Videos: Why I’m All-In On Tesla Stock 5 Reasons Tesla's CyberTruck is What AMERICA REALLY WANTS The Viral Video That Generated 250,000 Pre-orders ($14 Billion in Revenues) Selected Analysts' Price Projections Tesla: Ready To Re-Enter The Fast Lane Tesla Is A Must Own Stock – Piper Jaffray, Dec 3, 2019 3 Reasons Why Tesla Will Hit $6,000, According To Ark Invest's Catherine Wood
