Quick Tip

I would highly recommend picking up some more TSLA stock especially after it dropped in price and after Elon Musk’s Space X just got part of a $7 billion bid from NASA. I got some more yesterday. This has been the best performing stock in my portfolio.

Is The S&P Throwing Stones At Tesla?

I came across an interesting article about S&P’s mysteriously timed rating of Tesla recently.  The author questions S&P’s credibility given its inability to accurately forecast the mortgage crisis and its admission that “it didn’t know what it was doing.”

Tesla’s bonds (the debt that the S&P is so concerned about) aren’t due to start being paid until 2018 and they are positioning themselves to be in a fantastic position with the new Gigafactory that will be the largest producer of lithium ion batteries.  This will make the company way more valuable than it is today.  Consider the rise in brand appreciation and a larger market share with their sedan models, Tesla should have no problem paying back their debt and then some.

Here’s a link to the article:

Forbes Article by Mark Rogowsky

The Market is Still Rallying

The market is going bananas over the past few sessions.  Cramer had some good insight on why the market rebounded so sharply after the down sessions last week.  The bears were placing a lot of puts and shorting the market and when the market showed a little strength they tried to buy back all their shorts.  This is what happened in Trading Places with Eddie Murphy and Dan Akroyd.  The market kept going up as people tried to recover their shorts.

Now in terms of the one stock I’m really watching there is a strong contingent of bulls behind TSLA and whenever the market tries to short TSLA there is a huge rally when the selling pressure goes down.  In light of that there is a new development with the S&P listing Tesla’s debt as junk based off their cash flow as well as their recent and planned purchases. Even in light of this news the stock is still stable on after-hours trading.  It will be interesting to see what happens tomorrow.  

Tesla: Where To Go From Here

Here is some commentary on TSLA from CNBC:

CNBC Commentary on TSLA

The analysts say that TSLA is overpriced or at the level where it will now be consolidating and moving sideways.  They believe that there is no more equity left at least for the time being.  I am contemplating whether to sell at these levels and put my money into my dividend stocks or just hold and wait to see where it goes from here.  If TSLA paid a dividend I’d be more than happy to stick around, it’s just that I don’t want to tie my money up when I could be making money instead of letting it sit on a stock going sideways.

I’ll see what happens this week and then make my decision by the end of the week.

My TSLA Saga

So needless to say I (and probably a whole lot of other investors) had a rough day with Tesla.  The stock got beat up after hours and when the markets opened it tried to make a comeback but the Bears were too strong.  I'm down about 25 points from my entry yesterday.  My intention is to hold the stock for the long term but I wanted to see if I could time my entrances and exits off of technical analysis, so much for my timing.  I may wait and see how the stock performs over the next week and possibly build a position if it recovers.

TSLA Is Getting Hammered Today

The Bears are hammering TSLA today.  I sold my position for a loss because I knew it was going lower.  I’m going to try and scale back in when and if it hits $190.  There was a negative feeling about the missed earnings and with BMW releasing news about its new EV car to compete with TSLA.

********************************************************************

I got back in today at $202  because it found support off a resistance level.  Now the market has reversed possibly off of Janet Yellen's comments. This is a perfect representation of the chaos of the market. You never know what will happen.  TSLA had an earnings announcement that wasn't favorable and with possible competition the stock tanked today.  That coincided with the Fed Chair Yellen speaking today to conspire to make it a very schizophrenic day.

Take Profits When You Can

So just took my profits on Tesla today because of several reasons:

• The 20 period moving average crossed the 50 period moving average
• It’s the beginning of May and people usually “sell in May and go away”
• The stock is starting to get overbought on the slow stochastics

I’m going to wait for the pullback and get back in because I know this stock is going to go higher.  As I said before when you invest in Tesla you are investing in more than just a company you are investing in Elon Musk’s vision.  He is a tenacious owner and he has a way of surviving situations that is commendable.  As they say the best indicator of future behavior is past behavior and his ability to build his businesses and grow them amidst a chorus of naysayers bodes well for the future of Tesla.

Diversifying Your Portfolio and Dividend Yields

To start building your portfolio you should keep in mind that you must diversify. Tempting as it may be to put all your money into that one stock that is paying big dividends, you have to be smart and spread your money around to protect your investment

It's a good idea to put your money into different industries i.e. manufacturing, retail, technology, financial, minerals and entertainment.  This will keep you from being hurt too much when various sectors of the market are experiencing trouble.

I created a list of stocks that I am watching I chose to invest in several of these stocks because of how they look in my technical analysis. Many of them are oversold and are in a good position to rebound.

• Retail – TGT, WMT, DG
• Housing/REITs– ARR, CYS
• Technology – MSFT, ORCL, CSCO
• Manufacturing/Automotive – TSLA, F
• Financial – JPM, WFC, BAC, PNC, UBS, RLI
• Entertainment – SNE, TWX, LGF, DIS
• Communications – VZ, T
• Minerals – GLD

I especially like buying retail stocks right before the holidays they may take a downturn after their earnings report in the new year but at least you have an option to sell before then.

I mostly buy stocks with a high dividend yield however I will buy stocks that don't pay a dividend only if it’s a break out company, Tesla fits that criteria.

I recently read a couple of articles about diving deeper into analyzing stocks for dividend yields.  They talked about inadequate assessment in many of the current stock analyzers.  In order to get the true dividend yield you have to look at when a company distributes their dividend. Go back and look over the whole year to see if extra dividend payments were distributed.  If a company only declares a quarterly dividend then only the distributions over the quarter will be factored into the dividend yield calculation.  This however excludes additional one-time distributions which will sometimes dramatically increase the dividend yield calculation.

In short it pays to do your research.

Tesla Is Always A Good Buy

I really missed the boat on this one.  I saw the news article on Tesla and the battery catching fire and knew the stock would go down, but I didn't pull the trigger.  Tesla's back up something fierce today.  truth be told I should have bought stock last year when I was day-trading heavy.  It was my wife who told me to buy some and I should have listened.  In May of last year Tesla stock was around $55 then it shot up to around $100 and is now trading at $174 today. 

Elon Musk is not one to bet against.  With the savvy and courage to run multiple businesses and still keep them afloat he is the type of person who will always come out on top.  I'll wait for another dip and then get in on this one.