Tesla “disappointed”—NOT!

Good morning! 👋

Before we get rolling, THANK YOU for all the fabulous messages, emails, and texts yesterday.

Dad’s doing great after coming through surgery with flying colours. The docs kept him for the balance of the day as a precaution, but he’s home now and resting comfortably. It won’t be long before he and Mom are back at their favourite bench!

Now...

Let’s talk Tesla.

I could hardly believe my eyes yesterday when I saw reports suggesting “disappointing” results after Unka Elon reported earnings.

I’m not sure we were listening to the same call.

Tesla…

…beat top and bottom line while posting all-time-high quarterly revenue. The former (revenue) came in at $24.93 billion versus $24.47 billion expected, while the latter (EPS) came in at 91 cents per share adjusted, versus 82 cents per share expected, as per Refinitiv

…revenue from the core automotive business jumped 46% YoY to $21.28 billion, a 6.5% increase sequentially

…has rolled Cybertrucks off the line

…has started production of the Dojo AI computers

…targeted 1.8 million vehicle deliveries this year and remains on track

…has created a charging network the competition is adopting and for which it will receive hundreds of millions of dollars a year, effectively an annuity

…raked in energy and storage revenue from solar panels and backup batteries that was 74% higher YoY at $1.51 billion

…boosted services and revenues by 47% to $2.15 billion

Yes, margins fell to “only” 9%, but so what??!!

Image source: Electrek via the Visual Capitalist

Critics will say, “Yeah, but the competition’s coming,” and they’re right… it is.

Tesla’s share is still 60–70% of the EV market, according to Automotive News and Experian data as of May. Coke and Pepsi’s market share fell over time as the soda market grew.

The stock has returned 18,236% since 2010 while the S&P 500 has tacked on 338% over the same time frame, according to Eikon. That’s enough to turn every $1,000 invested on June 29, 2010 into $183,360 today versus $3,480 if an investor had purchased the typical S&P 500 index fund.

So yeah, you can be disappointed if you want.

I’m not.

Perspective is everything with a stock like Tesla.

History counts.

• Apple was treated the same way… then launched services that today account for $78 billion all by themselves.
• Amazon was openly scorned… then launched AWS and other services that today account for $80 billion.
• Microsoft was belittled because it nearly failed with Windows… now it’s just rocked the world with ChatGPT and put every competitor on the defensive.

The reason most investors fail when it comes to a stock like Tesla is because they lack the long-term framework needed to overcome short-term shenanigans and market volatility.

The real reason Tesla is “disappointing” has nothing to do with the stock itself and everything to do with the way Wall Street has rigged the system in its own interest. And the media is playing along with it, for the most part.

Musk is as unpredictable as they come—which means Wall Street analysts struggle to anticipate his next moves... so, rather than doing their homework, they poo-hoo him. Instead of viewing him for what he represents (the future), they repeatedly try to stuff him into an existing checklist when that, too, is painfully obsolete (because it’s constructed to “rate” the past).

Everything the man touches is disruptive, particularly when it comes to the ultra-valuable nexus of technology, energy, and innovation. This challenges the status quo, particularly when the stock doesn’t behave “like a car company” or can’t be modelled “like a tech company.”

Musk routinely sets targets others cannot grasp, usually because they don’t have the entrepreneurial mindset needed to see the future. Then he makes ‘em happen because he has the money to play by his own rules.

Jobs did it.

Gates did it.

Bezos did it.

Jack Ma did it.

El Zucko did it.

Sir Richard Branson did it.

Jack Welch did it.

Reed Hastings did it.

Elon Musk is doing it.

What I want you to think about today is simple.

Perceptions change.

Profits grow.

Investors who latch onto both tend to do very, very well over time.

Bottom Line

Companies like Tesla come around only a few times in an investor’s life.

That’s why it is vitally important that you understand what they represent and what YOU want to accomplish.

Let’s MAKE it a great day, as always!

Keith 😊