Tesla’ stock held $300 yesterday but has been in a sharp downtrend since doubt surfaced about going private.
Go Profitable Or Go Private
At some point, fundamentals will drive the shares again. Going profitable is much more valuable to shareholders than going private.
So while going private could fetch a measly $420, we still think going profitable can get the stock to $1000+. We may be low seeing Ark Investments expecting $4,000 per share.
Reuters ranks us with 4/5 stars for our estimates. Our numbers factor into the Street numbers. Our $1,000+ target is based on those same high ranking estimates.
Timing
Tesla’s stock is for sure volatile so we want to try to build that position at good prices. Building at poor entries decreases confidence in the position. I want conviction to hold to $1,000 but to do those great entries help a lot.
Entering at strong entries helps have confidence to keep the position for the long term.
We had noted previously that there’s huge longer-term support at about $280. Yes, yesterday looked like the stock can hold $300 which is a shorter term support.
But we’d note that the stock’s still been in a sharp downtrend.
How To Add
To add to a position we want to see it start moving up. We don’t mind getting in a strong long-term supports because we’d expect the fundamentals will take us higher than that level. But even better than strong support levels is we’d simply want to see the stock stop moving down and start moving up. Somewhat simplistic, but it works.
We’ve seen managers go out of business by constantly averaging down. We don’t mind lower averages but only if we see the stock moving up.
We don’t mind adding even higher and missing the low. I’m never thinking I’m smart enough to catch bottoms. I’d rather see the stock move up, which others will then see and that can get things going all over again.
Earnings
