Tesla Inc (TSLA-Q)

The stock is down 40%, but at 50% that's when it hits bottom and that's when you enter. So wait.

As a car company, never made sense to pay the demanding multiple. So an investor has to put faith in the technology side, and he's not comfortable with that. Musk is in the news big time, and he's not gaining any friends. International blowback against TSLA and Musk, reputational risk. Sales numbers weak.

Musk is a remarkable entrepreneur, but there's a lot of promotion involved. Right, particularly in the US, the people driving Teslas aren't happy, given DOGE and the White House. We see the backlash with protests. If Tesla survives 10 years, there will probably be a lot of revenue from self-driving cards, but Tesla has to get there. The brand has fallen out of favour. If things go badly in the White House, it would reflect more badly on the company, because Musk is so tied to the White House.

Over time, every major car company will have a slew of electric vehicles and TSLA won't be the only game in town. Brand's been damaged a bit from Musk's activities. Still not cheap. Better places to go with less risk.

Shares are cut in half from highs. Bulls say that Trump's close relationship with Musk should give Tesla a big advantage in self-driving cars and robots. But Tesla's core car business has collapsed and tariffs will be awful. Is the most expensive Mag 7 stock, trading at 87x PE. He can't trust their estimates--their car business is in such bad shape.

Funny that people who bought a year ago have to attach explanatory bumper stickers. If it's going to be a good buy at $200-225, it's a good buy at $265; you're buying it for the longer term. He can't come to terms with the valuation.

If you decide you want to buy, put in 10% today, and you'll feel better. If you've wanted it for a long time, and you don't pull the trigger today, you'll forever hesitate. It's just psychology. 

His father has a wonderful expression, "It's the second mouse that gets the cheese." Not sure tariffs are enough to provide continuing support for an EV car maker when the Chinese are doing it so much cheaper.

Its reputation has taken a hit this year due to Musk's highly polarizing involvement with Trump. This has taken the robotaxi story off the table, allowing Uber to roar. But robotaxis were never a threat to Uber in the first place. He still thinks Tesla has an edge given Musk's relationship with Trump, but he didn't expect this much public backlash against Musk/Tesla.

The problem is this trades on sentiment, not fundamentals. Of course, the issue now is Musk. Probably, enough people not buying their cars will impact their sales. Also, a Chinese competitor is outselling Tesla. The valuation remains a premium, but would you own such a company at this level with slower sales and this sentiment? He's rather see Tesla at $200 then take a look at it, and even then would buy a tranche.

He thinks Musk will hang around Washington no longer than end-June, then will return to work. Cars make up 70-80% of company revenues, which will change. They lead in gen AI. Next year, though, agentic AI and robotics will be the new theme in tech. Musk promises 20,000-30,000 Tesla robotics will be sold next year. Robots are used in car factories, but will be used one day in homes for housework.

People misunderstand the power of Tesla as a tech company. At these prices, the car business' sales could be cut in half and he doesn't know how much lower shares could go.

Highly controversial and polarizing name. Big hit recently, but that's after a big run last year. Overvalued as an automotive company. Massive brand destruction by Musk. 

But if you're looking at it for robotaxis, deserves a different valuation; essentially a call option on that future. How confident are you? You have every right to be skeptical, as they haven't delivered. Underlying architecture has changed, and they have a shot at getting there. Wait to see what happens at the demo in a few months. If they fail to deliver (again), stock will go lower; if they make progress, stock will rerate and you should consider buying for the long term.

Sales in other parts of the world are really slowing. For example they are down over 70% in Germany and Australia even though EV sales are up in Germany. Elon Musk is unpopular and is also spending a lot of time in Washington instead of running the company. The stock is at about half its value from its all time high but is really just giving up this gain and is back at its baseline in its five year chart. Elon Musk says that there are big gains ahead.

Old resistance becomes new support. So what we're seeing now may, may, MAY be support (note the repetition ;)  There may be a bounce, but a couple of days is not enough evidence that the market's starting to forgive whatever it was they didn't like about it. Until that happens, why risk it? He'd wait and watch closer to his 3-week timeframe to confirm the bounce.

It finally reached undervalued levels, which should lead to a big bounce. During recent selling by retail investors, the stock has been showing aggressive professional buying. Seasonality starts this time of year. Also, LW's cycle forecast points to a rally, based on history.

The ones that are nice to King Trump. He'd hope that TSLA and AAPL would escape additional tariffs on China. 

Except for TSLA, the other Mag 6 have come down to very reasonable valuations. For example, AMZN's trading at a discount to WMT, which makes no sense. GOOG is trading at 19x earnings. Thinks AAPL growth will be double digit. This is your chance to buy quality companies at reasonable valuations. See his Top Picks.