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Tesla’s back at $200-what to do right now

Feb 09, 2023

Good morning!

Traders are on the gas after some strong earnings from the likes of Pepsi and Disney. I don’t know how long that’ll last given the way algos work these days... but this is yet more powerful evidence that we’re on the right track.

When in doubt, zoom out!

Here’s my playbook.

Bob Iger’s not messing around

Newly seated CEO—for the second time—Bob Iger unveiled a massive restructuring plan that will send 7,000 employees packing and result in $5.5B in cost cuts. Shares jumped 7% in pre-market trading, with good reason. Iger previously served as Disney’s CEO from 2005–2020 and is deemed by many to be one of the most effective CEOs in the company’s history. (Read)

I like what I see, especially since I noted to Stuart Varney earlier this week that I expected Iger to bust a move. (Watch) Even so, I want to watch the stock for a quarter or so before buying. You can’t turn the Queen Mary on a dime, as the old expression goes.

Tesla’s back at $200—I hope you got on board

I encouraged investors to buy Tesla so often in late December and early January when it dropped to new lows, I was accused of sounding like a broken record. Often on national TV, as was the case during this appearance with the fantastic Lauren Simonetti. (Watch)

Some investors at the time didn’t want to get on board because they couldn’t get past their dislike for Musk himself or fears about his Twitter takeover... like the one I spoke with in a local coffee shop. “Isn’t there anything else?” he asked.

“No,” I said.

Betting against Elon Musk now is like betting against Steve Jobs back in the day. Elon Musk sets the bar in every industry he tackles. Whether you like him or not doesn’t change that fact, I told him: “The company is not only going to be back but will hit new highs more quickly than most people are prepared to believe.”

I hope you got on board, too.

OBAers: You may be coming up on a 100% gain with at least some of your shares if you’re following along as directed... and that means it’s time to take some money off the table while simultaneously converting the remaining shares to a Free Trade. The second 100%er in a matter of weeks—well done, everyone!!! 💯💯💯

If you’d like to take your game to the next level, you might enjoy my premium research journal, One Bar Ahead®. You’ll be joining a worldwide community of super-fun, super-savvy, and super-quality folks interested in building real, sustainable wealth! Upgrade to Paid

There are 10–15 Teslas out there right now, BTW!

Pepsi rocks it (again)

Pepsi just blew out revenue and earnings as I suspected might be the case. But there’s a wrinkle. Volume fell 2% worldwide as its food business hiked prices and consumers balked. (Read)

I don’t own shares at the moment but sure appreciate those who do, especially since management just hiked the dividend, too.

Hmmm.

Even Buffett may be worried about China

Berkshire Hathaway sold 4.235 million shares of electric-vehicle maker BYD for $139 million (USD), according to Hong Kong stock exchange filings. Granted, the sale lowered Berkshire’s BYD-issued H-shares to 11.87%, from 12.26%, so some folks won’t read this as a big deal. (Read)

I have a different take.

MyPOV: Buffett may be worried about China, even though I’m not aware of any public commentary to that effect. I say that because there is no such thing as coincidence in this business.

Individual investors would be wise to take Buffett’s move into consideration, especially if they own ETFs or mutual funds tied to the region. Many ETF and mutual fund investments are passively indexed to either the FTSE or MSCI index—sometimes both—and have huge exposure to China.

Take the iShares MSCI Emerging Markets ETF (EEM), for example. As of February 8, the fund had a 32.92% exposure to China while the next-highest country exposure was Taiwan at 14.87%. This could really come back to bite some people in the you-know-what if the SHTF over there.

Fortunately, there are alternatives. The iShares MSCI Emerging Markets ex China ETF (EMXC) is one; the Columbia EM Core ex-China ETF (XCEM) is another.

64% of Americans now living paycheck to paycheck

This doesn’t sit well with me as you can easily imagine. Another 9.1 million folks say that they are stretched too thin as the cost of living continues to surge. That brings the tally to 64% of Americans and near the all-time high set in March 2020.

And this isn’t limited to the poor or limited earnings, either. More than 50% of those earning $100k+ a year said the same thing. That’s up from just 42% 12 months ago.

Quick money moves you can make right away:

Cut expenses and boost savings.
Buy what you need versus what you want.
Plan your shopping and shop your plan.

The problem for many is that savings accounts won’t cut the proverbial mustard because rates are clearly not keeping up with inflation. That’s why I’ve repeatedly suggested short-term Treasury bonds including federal Series I bonds that are nearly as risk-free as you can find... AND inflation protected.

In fact, I wrote an entire feature-length article on ‘em in the July 2022 issue of One Bar Ahead®. Upgrade to Paid

Personal finance expert Suze Orman notes—and I agree with her entirely—that there are some limitations. For example, you can’t redeem Series I bonds for at least a year. What’s more, you’ll pay a “penalty” equal to the previous three months of interest if you cash ‘em in before 5 years are up. And you’ve got to buy directly from Uncle Sam.

But don’t let that stop you—Series I bonds can still be a powerful choice for many investors!

Or perhaps, simply buy eggs. 🤦‍♂️