Elon Musk’s Tesla is Having a Historically Bad year.
We are glad to see you back after the Christmas weekend. Phil Rosen reports from Los Angeles.
Usually in December the talk of the town is upbeat and cheerful — holiday music plays and White Elephant exchanges are all the rage.
Tesla, the world’s top-selling electric vehicle brand, is often there to cheer them on.
Elon Musk’s company is the most sought-after stock of all time. However, it has seen years of growth.
However, this is not the case for 2022.
Tesla is among the S&P 500’s biggest losers this year, and most of its meteoric pandemic gains have been all but wiped out.
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1. Elon Musk has cited the Fed as the reason for Tesla’s declinesWith the company’s market value dropping $600 billion over the year,
Now, however, because of macro headwinds, it is historically inexpensive (and Tesla bearsMusk claimed that it is a great investment and has made a lot of money. buying opportunity.
“I keep saying the Fed rate is insane because of data I’m seeing,” we’re already in deflationLast week, he tweeted “Thank you!” “If true, then real rate of return of T-bills is roughly that of S&P500. Very smart investor I spoke to today said he’s shorting S&P…”
The inflation rate soared to a 40 year highIt was 9.1% in June and the most recent data clocking in at north of 7%. This is still well above the Fed’s goal of 2%.
The central bank attempted to cool the market with a series of aggressive interest rate increases.
The idea is to have higher rates translate into higher returns from savings accounts and government bond investments. makes higher risk investments like stocks less appealingCompare.
Musk, howeverPrices have already started to drop, which has led to a significant decrease in prices. eliminates the needFed to keep rates at such high levels. As he wrote in another tweetLast week:
“In simple terms, as bank savings account rates, which are guaranteed and stock market returns, start to approach stock exchange returns, which cannot be guaranteed, people will more often move their money from stocks into cash, causing stocks drops.”
Musk is right, however.Although stock demand has declined, there is still a demand for stocks. flaw in his argumentAccording to Gary Black (Tesla investor and Future Fund manager), it is currently at.
“Elon – it’s impossible to compare a short-term bank with a long-term $TSLA stock… TWTR closed on TWTR. TSLA [is down]-38% vs NDX [Nasdaq 100] -1%. If it were all [interest]Rates, NDX would go down a similar amount,” Black tweeted to Musk.
Also, higher interest rates are not a guarantee that stocks will be less profitable. why Tesla has seen outsized lossesMusk has closed his purchase of Twitter.
In any event, Black is still a Tesla believerCathie wood, ARK Invest’s Cathie Wood has been buying the dip every quarter.
In the end, Tesla investors shouldn’t feel alone in their grief at low stock prices this year. The tech sector has lost roughly 5% between giants Apple, Microsoft and Alphabet, Amazon, and Meta. $3.65 trillion in market valueThis year.
What has your opinion of Tesla stock changed since October, and how do you feel about it? Tweet me (@philrosennEmail me (firstname.lastname@example.orgTo let me know, please use (
In other news:
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4. These are the top performing funds in 2022. Their managers shared their stories of how they got through a difficult year in the stock market. and shared the stock picks that worked best.
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6. A 20% drop in home prices will be accelerated by rising housing inventory Pantheon Macro said this, stating that the demand collapse of the past year is still enough to cause home prices to drop. Even so, a meaningful recovery “is still miles away.”
7. As historic inflation starts to fall, the fear gauge on the stock market will plummet by 2023. And, in Fundstrat’s view, that will tee up the S&P 500 for a 20% surge. Once the Fed initiates a policy pivot, the firm believes equity concerns among investors will begin to alleviate.
8. Rob Arnott provides advice to the world’s leading investment firms. He shared two trades that could deliver 15% annualized returns over the next decade — and breaks down why inflation might remain elevated for far longer than investors are expecting.
9. The rapid rise of this Wall Street headhunter was fueled by allegations of harassment and abuse. Durlston Partners lured employees with promises of fast cash and epic parties and a unbeatable culture. Ex-staffers tell quite a different story.
10. Warren Buffett’s Berkshire Hathaway has generated steady returns despite the turmoil this year.The Oracle of Omaha advised against the exchange of stocks for gold or cash during wars. To Buffett, productive businesses make a better investment over safe-haven assets.
Phil Rosen, Los Angeles. Comment or tips? Tweet @philrosennSend an email email@example.com
Max Adams edited this article@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.
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