Is It Time To Buy Gold?

Given the rise in the equity markets gold has gone down.  Gold is typically a hedge against market downturns.  It would seem to be counter-intuitive to buy gold now that stocks are giving a bigger return.  Plus no one knows how high the market will go.  However, now is probably the best time to start building a gold portfolio.  As the price of gold goes down due to higher equity returns you can buy more of it.  As the adage goes: "buy when people are selling and sell when people are buying."

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

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.

Climate Change and Stocks

Because of the weather this year many retailers like Walmart (WMT) who’s price got hammered today have missed their earnings estimates and have caused the market to be extremely volatile.  If there’s one reason to pay attention to climate change it’s because of the effects on the market.  With heavier storms called for in the future there will be fewer opportunities for consumers to make it out to brick and mortar stores especially during the holidays.  One way to play this market situation is to invest in online retailers and delivery services.  Amazon is of course the largest online retailer but there are other companies like Ebay (EBAY).  Some of the delivery services to pay attention to are of course Fed Ex (FDX) and UPS.

The key is to look for bargains.  Look at companies who have an active and extensive online offering.  This is a good indication that they are making money from their online store.  You of course have to do due diligence and see what the PEG and EPS ratios are and pay attention to the trend and the price overtime.  I would also look at the management and maybe even Google some of the management team to see how they have fared over the years.  If a company is well managed, has a strong PEG ratio, and an active online presence then consider it a bargain.

You can also do the contrarian play and short big box retail stores like Walmart (WMT) and Target (TGT) but be careful.  If the companies you are looking at are making the necessary changes to increase their online sales and using alternative delivery services, then it’s not a good bet to go against them.  

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.