Calling It As We See It (TSLA, ASML, TSM)
Musk did another thing. Well, two things...
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We have no agenda at Chit Chat Stocks. Well, that’s not technically true: we want to find the best stocks to own for our portfolio (and maybe yours too).
But it is true in the sense you are thinking. There is no agenda we are trying to push with the podcast. We are not out to get anyone, want to push some investing style (like ESG, for example), or push a political narrative.
We just call things in the investing world as we see it. That’s it.
Sometimes, we give our opinions, and you will disagree with them. Sometimes, our opinions will look stupid three years later. It happens.
None more so than with Tesla. Tesla stock is up around 10x in the last five years, and I have doubted the business the entire time. I have doubted many claims from Elon Musk.
This week, I continued to doubt them. The “We, Robot” event that hyped up the Cybercab and Optimus bot looked like a lot of nonsense to me. Even the online reviewers invited to the event seem to think so:
There is no Cybercab or Optimus Bot to buy today. No technology has been proven. Musk still says robotaxis and self-driving are just a few years away.
I will continue to doubt these claims.
This doesn’t mean our podcast is “out to get” Elon Musk. In fact, during this same episode, we hyped up SpaceX and said they are executing extremely well. Which is clearly true.
On Wednesday, Tesla reports Q3 earnings. I think it will be another ugly one. Deliveries were up year-over-year, but average selling prices were likely down. Revenue might fall year-over-year.
Operating income is almost certain to fall. Free cash flow may be negative. The stock trades at 7.4x sales with ~18% gross margins. Tesla stock looks grossly overvalued, and I believe this quarter will prove so yet again.
But will anyone care? No, I don’t think so. Because there is another carrot being dangled in front of their faces.
-Brett
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