2/24/25 - $tsla - High on watchlist to own...2/24/25 :: VROCKSTAR :: NASDAQ:TSLA
High on watchlist to own...
- fundamentally, there's a lot of "if this" priced into the stock, there's no denying it
- even round up '26 FCF from 8 bn (current expectation) to 10 bn and you're at a 1% yield. but also acknowledge... here it is again... "if, then" it's also growing at 100% yoy, and likely dirty cheap too
- seeing that grok 3 deployment, the DOGE work, rockets, video game, edgelord X... let's get this straight, Elon is
1/ not someone to bet against
2/ continues to deliver surprises across the board
3/ is at and defining the intersection of AI, robots, energy and US-first policy
- so while we can look at multiples all day, i think NASDAQ:TSLA remains a bet on what Elon can deliver in a 10Y context with a high discount rate.
- if robotaxi, optimus... solar roofs (y'all know my view on solar as % of generation) all come together nicely, there's little doubt in my mind that he's right, NASDAQ:TSLA is probably the largest publicly traded company, and make up a number, $10 tn+.
- so if we reduce the probability wave into a duality, "success" and "fail" and nothing in between (for simplicity, albeit an imperfect representation of reality).
- if success is $10 tn in 10 years
- and fail is a bagel ($0) in 10 years
- and we use a LT investment discount rate of 10% ("low enough" to capture the market's current view of stocks at 3-4% for megacap, moat/ validated names but low, but "high enough" to also factor in failure, waiting period etc. etc.)... that $10 tn in today's terms would be 10/(1.1^10) = 3.9 tn. so...
3.9 tn * 10% + 0 tn * 90% = 3.9 tn.
market might be saying... how about it's a 20-25% chance of success and nothing in between. or the market could be saying 10% chance of this success but also many scenarios in between that also give us 1 tn, 2 tn etc. of value. and as a result, the "real" valuation today perhaps does sit closer to that $1tn valuation.
the conclusion, for me, is that technicals matter more for a name like NASDAQ:TSLA in the short-term (like they do CRYPTOCAP:BTC ) than in the long-term as these fundamental factors are delivered (or not) and cash is generated (or not).
the gap fills in the low $200 do catch my eye. those are pretty large gaps. ESPECIALLY the post-election gap, which was more of an "elon benefits from being close to trump" and not necessarily (*necessarily* - though i see it both ways) a speed-up of these above mentioned fundamental factors.
I'd be eyeing the mid $200s to get involved again if/when.
i do think the stock is a LT buy at today's levels. but i just don't like the R/R given the drawdown potential (based on above logic) compared to other opportunities in my book today, namely NASDAQ:NXT , CRYPTOCAP:BTC , NYSE:UBER , $tsm.
but i'll be watching carefully and i'm willing to jump in higher if i need to. that's cool too. just not yet.
V
