Edit: This update took little longer than I expected (still working off of back-up computer, long story, not relevant, don't get me started, don't buy AAPL) so I will get to The Big Picture and Bitcoin during the week. A Tesla Tesla is on its way to becoming a $3,000 to $5,000 stock by the mid-2020s, as early as 2024, or a late as 2026. The underlying analysis is out there for anyone to dig it up, but is beyond the scope of this Saturday morning update. I will convey the story systematically, as time permits, in the weeks, months and years ahead. In summary: (1) Tesla owns the electric vehicle sector, its nearest competitor (Toyota) is 3-5 years behind. When its technology reaches where Teslas' is today, Tesla will then be another 3-5 years down the road from where it is today, i.e., still 3-5 years ahead of the competition. (2) While all of this "competition" in the EV industry is taking place, global transportation, on individual, commercial and mass transit levels, is going electric. The world is changing and looking back decades from now will be tantamount to looking back to the transformation from horse and buggies to the Model T. (3) Imagine owning Ford shares in 1903. Its closet competitors ended up being General Motors...which was formed in 1908. Not so coincidentally, that amounts to a 5 year head start. (4) Tesla IS NOT just a car company, and as such subject only to traditional auto manufacturing and valuation models. Tesla is a high tech company, a green energy company, an artificial intelligence company, an energy storage company, including but not limited to backing up the global electrical grid, and an engineering and manufacturing company, i.e., making the machines that make the machines; Gigafactories and Terafactories. (5) The underlying assumption for everything we do with Tesla shares and options will be based upon that $3,000 to $5,000 share price sometime in the next 5 years, give or take one year. Hyperbole? If so I have a lot of company. Those analysts and money managers who follow Tesla the closest (we've previously discussed Cathie Wood, Ron Baron and a host of other Tesla online aficionados) who are most versed in the intrinsic value of the company, the aggregate worth of the various pieces set out above all seem to be zeroing in on $3K by 2025. As a group, they got it right in 2018-2019 when they projected a $4K share price pre-split. TSLA actually reached $4,500 ($900 post split). Do not underestimate either Elon Musk or Tesla. The sheer magnitude of the bullish case demands attention and at least an overweighting of TSLA in everyone's portfolio. For the traders among us, which accounts for 80% of my subscribers, on the road to $3,000 in the next 4-5 years there will be embedded exponential potential returns from options, specifically the 2-3 years out-of-the-money LEAP calls. There will be a heavy emphasis on exploiting these highly leveraged derivatives to compound returns over and above merely holding shares for a 5X gain on the way to $3K. The time to begin trading this multi-year move is now, initial LEAP positions that will be added to on any bumps in the road. These positions are not risk-free, but they are reward immeasurable, a fact, not hyperbole. Core LEAP Position Call Option Alternatives (among others per individual preference) Jun 16th 2023 $1,400C ($75 = $7,500) Jan 20th 2023 $1,200C ($70 = $7,000) Jan 20th 2023 $1,500C ($45 = $4,500) Jun 17th 2022 $1,000C ($55 = $5,500) Jun 17th 2022 $1,200C ($33 = $3,300)
