Toyota (TM-N)

Auto sector mixed. Supply issues. Peaked in March, now lower highs and lows. Downward trend suggests traders selling the rallies. Just because a group moves in a certain direction, doesn't mean everything does at the same time.

Business performing well. Has taken a measured approach to EV adoption. Slowly getting into EV sales, but doing so strategically. Excellent cars that last a long time. Brand name very strong in North America. 

Made its bed on hybrids vs. EVs. Who knows where the technology will be 10 years from now? Car companies are very capital intensive, so earnings get badly impacted in a slowdown. Not great value. He owns RACE.

Didn't rush to build EVs the way others did, and this will help in the long run. In general, EVs are not selling well, inventories are building up, and infrastructure isn't yet there. Hybrid option has the most mileage longevity, and Toyota seems to be going that route, which is the most prudent approach. Great cars, huge company. Safe for a 3-5 year hold.

Depends on your risk tolerance. He's been looking at GM recently, but hasn't taken any action. Really good recent quarter, will be pressure on financing side of the business. Targets are pretty optimistic. TM is a safer bet for the next year or so; it's a giant company with improving profits, uncertainty on EV strategy is not a short-term game-changer. TSLA is his favourite EV play in the auto-making space. TSLA has already won the EV race, especially as to vertical integration.

He used to own a lot of Ford and GM. Auto sales have not really increased since the 1990s. Now with the disruptive forces of Uber and Lyft, the space is that much more challenging. Transport is changing. Owning a car is not always part of the assets one owns anymore.

Starting to see a slowdown in car sales, so he wouldn't buy any autos. Instead, own a company growing its free cash flows and has little debt. Carmakers' (and airlines') capex is through the roof and they generate little cash flow. A cyclical industry.