☕ A simple Tesla trade idea

Good morning! 👋 

The markets are green again in early going as earnings season ramps up. 

This shouldn’t come as a huge surprise. 

Big money traders and Wall Streeters have done an extraordinarily effective job of scaring the weak money out of the markets over the past few weeks.  

I’ve encouraged you to buy. 

Remember how the game is played... every seller has a buyer and vice versa. 

Think about it.  

If the boffins who control the narrative are doing their best to convince you the sky is falling, there’s a high probability the opposite is true. 

Always do what Wall Street does, not what it says. 

Hooyah! 

Here’s my playbook. 

1 – A simple Tesla trade idea 

Tesla announces after the bell today in what may be one of the single most important calls all (earnings) season. 

I don’t care so much about the numbers, frankly. 

• If Unka Elon pulls a hat trick, the stock could rip higher because Wall Street has scared the snot out of the weak money. I smell the potential for an epic short-squeeze. 
• If he comes in weak and Wall Street still senses more money for the taking, big money traders will pummel it. Then start buying when they’ve cleaned out the pipes. 

There’s potentially money to be made either way. 

The trader in me is drooling. 

One way to play that... 

• Buying a $145 straddle using options that expire 4/26/24. This looks to be roughly $13.65DB (meaning that it’ll cost you $1,365 per spread to make the trade) as I type. 
• Win, lose, or draw – exit come tomorrow morning. 

Meanwhile, the investor in me is comfortable with what I own. So, I’m going to have a nice cool drink and watch the fireworks. 🍹 

Note: Do NOT try this trade if you have no idea what I am talking about or can’t afford to lose 100% of the money you place at risk. This is a speculative shot for experienced traders only.  

2 – GM's trucks rock 

GM announced a big beat, noting that revenues for Q1 rose 7.6% and net income surged 26%. Truck sales were largely responsible for the news. (Read) 

Has anybody checked on Pete Buttigieg this morning? 

Joshing aside given the Secretary’s affinity for all things EV and smaller vehicles, this is interesting. 

Why? 

Because the markets have once again proven that bigger vehicles are still better, or at least more powerful and better financed. 

I can’t wait to see the loan data because, you know, payments. 🤦‍♂️ 

3 – Another sign Google’s days are numbered? 

Google’s search boss Prabhakar Raghavan told employees that they better get ready to step on the gas – meaning work faster – because of what he calls a “new operating reality.” (Read) 

I’d like to believe that there’s a dawning recognition inside Google that it’ll need to compete, but I worry that it’s too little, too late. 

Google’s days are numbered imho. 

4 – Novartis delivers: I might need a rethink 

Swiss drugmaker Novartis delivered the goods earlier this morning. (Read) 

I prefer a few other names but it’s hard to argue with strong numbers. 

The true shareholder yield – which I look at because I believe it to be a much better, more telling metric than the listed yield of 3.80% - is substantially higher at 8.19%. 

It might be worth re-examining why I don’t own shares and doing something about that! 

5 – Walmart’s BNPL play is a shot across Affirm’s bow 

Walmart announced that its fintech startup, One, is introducing BNPL – buy now, pay later – as the company prepares for a bigger push into lending. (Read) 

Coupla takeaways here: 

1. One is a Walmart backed start up and this move puts One in direct competition with Affirm which has provided Walmart BNPL loans exclusively since 2019. 
2. Walmart may be gearing up for a run at Costco 

Pair Trade Idea: Buy WMT/Short AFRM 

Bottom Line 

Understanding psychology is key to investing success. 

Why? 

Because research shows that 85% or more of all buy/sell decisions are wrong - meaning investors buy when they should be selling and sell when they should be buying. Usually because they let their emotions get the better of ‘em. 

Keep your emotions out of the equation! 

As always, let’s MAKE it a great day! 

You got this – I promise. 

Keith 😊