Musk Opens Patents

When Tesla opened up its patents last week, that was a game changer for the electric car industry.  Some may question the move but as I said before, it’s not a good bet to bet against Elon Musk.  Aside from having a fighter’s spirit he has the ability to look long term and the resources to support it.

According to Musk, his reasons for opening up his patents were based on the situation we are in regarding climate change.  He wants the conversion to electric cars to happen faster than it is already so we can reduce carbon emissions before things get any worse.

Musk stands to gain immensely from the increased output of electric cars through the ancillary sales of his batteries and components and through his charging stations. Sometimes the stars align for certain individuals and it looks like this is a great set up.   

Here’s the company’s full statement:

Tesla Motors Statement on Patents

 

Tesla Benefits From Space-X

Tesla has the potential to become like a Google or Facebook because of its investment in battery technology.  What many of the bears aren't realizing is that the company is run by Elon Musk who has two other groundbreaking companies and one hasn't gone public yet.  Basically if you want to invest in his activities Tesla (TSLA) and Solar City (SCTY) are the only options for small investors.

If and when Musk takes Space-X public, that will be a boon for his other ventures.  If you hear interviews with Musk and watch his past behavior he does what it takes to keep his companies afloat.  He even risked his personal fortune to keep Space-X running when it was about to go under.  Now with his unveiling of his new capsule and after he has some successes under his belt it is a perfect opportunity to take Space-X public.

Here’s an article on Space X’s unveiling of their new capsule:

Space-X New Capsule

Here’s a CNN article asking that questions and giving some context on Musk’s IPO opportunity:

Space-X IPO

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

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.

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.