Tesla
Since its peak market cap of ~1.2T in 2021, Tesla has dropped (-57%) to 555B as of 12 March 2024. Drop of such magnitude has only occurred 3 times in Tesla’s history -
Sep 2014 - Feb 2016 (-51%)
Sep 2017 - Jun 2019 (-54%)
Feb 2020 - Mar 2020 (-63%)
As expected, those were times when sales took a hit, bringing about negative sentiment surrounding the company.
Despite the fierce sell off, Tesla continues to be the innovator in this space, led by Elon Musk who’s recognized as a genius by Trump AND Putin.
“We must protect our geniuses at all costs” - Donald J. Trump
"I think he's a smart person. I truly believe he is" - Vladimir Putin
Elon musk is the Steve Jobs of this era and I will likely regret not investing and rooting for this company.
This company is the only company other than Nvidia that ticks all the boxes. Just to name a few criteria:
Founder led
Founder is the thinker and doer in 1 person
Mission focused, doing world changing impactful work
Able to attract top engineering talent
Huge market given the importance of their work
Strong brand driven by their promise to accelerate the world towards sustainability
This will be a short post as Tesla’s greatness is widespread over the internet. I’ll end off with valuation and levels where I’m watching to buy MORE shares.
Buy levels
If one does not already own shares, I would buy 1/3 position here (~$175).
Next, ~ $150 +/- 10 (another 1/3 position)
Finally, ~$110 +/- 10 (Final 1/3 position)
Valuation
Intrinsic Value derived at $150 (rounded up).
Assumptions - $12B in profits which will grow 20% per annum in the next 5 years, 13% in subsequent 5 years, and then 8% ten years thereafter. Slap on an 8% discount rate and there we get the Intrinsic Value.