What the hell is going on with Tesla Right now? this stock is down 70 year to date. Oh my goodness. What A Bad month? What A bad year? It is up today by almost two percent. But goodness gracious.

Now in this video, I'm going to answer a question that a lot of you are wondering because a lot of you have Tesla stock or considering investing or considering to sell whether it's the right time to sell the right time to buy or just the right time to keep holding on. I'm going to answer that with a clear answer in a second. but bear with me here for a second. You know, bear with me with this.

Market I Mean it's kind of funny. So the only person that I've seen in the news right now from the high profile investors that are still loading up heavily on Tesla at this point, it's Kathy Wood So she loaded up on 130 000 shares of the past 10 days, just 25 000 shares yesterday. and I I I I mean that's absolutely insane I Mean at this point, I'm not even sure that it's good for Tesla that she's buying so much because she's already kind of becoming the negative Catalyst or the negative indicator for any stock she touches. I Mean at this point she can Rebrand Arc to be a tax Haven because think about it, you buy it rktf and you never have to pay Capital Tax gains ever Again, it's a it's a tax shelter and at this point that's that's all she has to offer.

So hair loading up is definitely not anything I would use as a positive Catalyst or an indicator for the stock she's taking over Kramer as the you know, the negative indicator of what the stock is going to do. Now on the serious note, we have to talk about fundamentals here for a second before there's no. There's no way for us to analyze whether it's the right time to buy, to sell or to hold without looking at fundamentals. I will talk about Macro and they'll talk about all the problems with the stock because we're not going to sugarload anything in this video because I want to give you the most amount of value not just to you know, fluff my ego and talk about how great a stock is.

Now look fundamentally speaking. the first thing you have to look at is price to earnings with Tesla I mean price to earnings with Tesla have traditionally been you know, unhinged from from fundamentals and rightfully so I Think Still, it is hands down the best company in the stock market right now. Easy. But the problem is that even though it's currently at a historically low PE of about 30 and forward p is actually even sub 30.

the problem is that the markets have changed. you know. the other day I saw an interview with Quentin Tarantino and he was talking about how he wanted to cast I believe John Travolta to play a Miss You Candy in Django and then eventually he cast Leo DiCaprio but he said I really wanted John Travolta when I was writing the script, but then I realized he's like 20 years older than what. I remember him and that's the same thing you remember.

the multiples from 2020 2021 the markets have changed. It's not the same multiple. so even though you know for Tesla 30 is low, it's not an objectively low number in this bear market. So this is not some automatic indicator where you mortgage your house and buy more Tesla stock NOW Beyond the fact that the markets have changed, you have to also understand that it's the fed.

The FED is driving a lot of this downward momentum. They're raising interest, and unfortunately for long-term Tesla investors I have bad news for you. This isn't going to change in the next couple of years. Jerome Powell himself said the FED does not expect to hit two percent inflation before 2025.

So at the very least, next year and in 2024, we have similar monetary policy. Which means that Tesla will keep suffering from that. There's no way to sugarcoat it, especially when Tesla still doesn't have a 27 28, 000 car to compete with the Toyota Corollas and the Honda Civics and whatnot. Until that happens, they're always going to be in that problem.

now. How low can Tesla drop? Because if the next couple of years is going to be tough I Want to explain to you what is the downward exposure? I'm bullish on Tesla I'm a long-term investor, but you have to understand that if you are staying for the next couple of years, it's going to be a bumpy ride. And in this video I want to explain exactly how bumpy it can get. Now look so far, the indices have dropped pretty heavily.

right? The S P is down 20 percent, the Dow is down like 10. NASDAQ is down 34. So one might think that this is very close to you know the bottom I mean how much worse can it get? Well, historically speaking, there's a lot more. This company can go through with the rest of the market because if you go back and you look at what happened in 2000, you look at what happened 2008.

If this is the next generational crash similar, those two I mean the numbers are quite alarming. The average drop in 2000 2008 between these three indices was 53 for the S P 500, 46 for the Dow Jones and 64 for the NASDAQ. Which means that except the Dow Jones which can drop another 5x from here, we're pretty much only halfway there for the S P 500 and the NASDAQ. So at the very least, if you take anything from this video, take this.

It can get much, much worse. and If the Fed decides to continue with its restrictive monetary policy for longer. This is probably a huge exposure that you have to accept as a long-term investor in. Tesla I Mean this is something that you have to acknowledge if you're not willing to accept the possibility of losing another 50 on your Tesla stock from this point on in the next two years.

Probably not a good idea for you to invest. But at this point you may ask yourself, well, Tom If that's the case, why not just sell and wait two years and repurchase? Tesla Great question. Well, let me explain. the problem is that this mentality is called by high Sell low.

You get caught selling into fear and buying into Fomo. This is the classic example of trying to time the market. This is why, virtually for like 99.9 of investors, it's impossible. It's very, very hard time to market.

The reason is because human psychology is very, very fickle now. I Want to point out a very interesting study that I read on substack from Market sentiment that actually examined how staying the course looks like over the past 20 years. Because at the very least, this is what you should take from this video. In their example, they've tested human behavior at its finest.

They used a bunch of different types of investors and they went through the 2000 2008 crash and they've seen how they performed. So essentially they had guys put in a hundred dollars into the S P 500 every month like clockwork. but get this every time. The index this S P 500 would drop 10 percent below the previous all-time high.

The three investors will behave differently. One investor will just stop putting in money until the point of return goes back and goes back to that minus 10 and above. The second investor would keep on putting a hundred no matter what. Just ignore the noise, put in 100 state of course.

and the third investor is absolutely bananas. Whenever the index drops ten percent below the all-time high, he doubles down and invests 200 200, 200 every month. And he keeps doing that until the index goes back up to minus 10 from the all-time high and then he starts doing 100 again. So Double Down stay the course or hold.

Basically what they found is that between these three investors, the two that had the best performances are the ones who either stayed the course or double down. But the differences between the staying the course investor, the one that puts in 100 every month and ignores the noise is absolutely insane. So they've tested 1998 all the way to January 2022 before all this craziness started, so before this next crash which is kind of developing for the past year. So what they got is actually very interesting because the one that stayed the course of the past 22 years 23 years generated 330 in returns.

The investor that actually held and stopped actually adding to his Sap position when the market dropped 10 below the all-time high made 240 percent. So over the course of 20 years, 20 plus years, there's that 80 percent difference between trying to time the market and actually staying the course. And a lot of you may say, well, Tom this is 20 years. Who has 20 years? Look at what's going on this year and next year.

I Mean if you're not thinking in 20-year increments, you're not a long-term investor. I'm sorry you're just not because long-term investing has one goal: Build enough for you to retire on. It's not built enough to buy a Lambo next year. It's not built enough to buy a boat in three years or a bigger house.

The idea of investing long-term investing is build a pension for yourself when you actually have to retire. So 20 years is right in that neighborhood. If 20 years is too long for you, you're not a long-term investor. I'm just.

you know it is what it is, at least not by the classic definition. And just to be clear, that guy who did theoretically 330 in 20 years by just putting in a hundred dollars into S P 500 and ignoring all the noise. he lived through some really horrible because during those two crashes I just told you the S P 500 drop on average 50. the NASDAQ dropped on average 64 and the Dow dropped 46.

So they lived through a lot of fear. But stay in the course Actually makes sense. But it's not without pain. And look, it's not a U.S problem.

It's a global thing. The world has printed too much money and now we have a global inflation problem and every single Central Bank in the world is trying to put this Genie back in the bottle and the price is going to be paid by investors and everyday people. even the IMF who by the way I thought is the international Mfers Before I did the video, but apparently they called it International Monetary Fund. they're guiding for 50 less GDP growth next year in 2023 and that's not something you take lightly.

So the economy, the global economy. The U.S economy in 2023 is not going to be better off than this year. What do you do with your test investment Or the lack of Dubai more? Do buy and do you sell out? Do you hold? First of all, I'm going to explain something very, very simple. This is definitely not the right time to go into margin.

You're going to get burned. I Mean the next two years are going to be so insane. I'm not saying there's not going to be runs and you know, times of happiness in the market, but I mean not a good time to gamble away a margin account on anything. Definitely not a stock like Tesla which will be erratic in the next couple years.

So assuming I'm not talking to uh, people who have no money to invest in their uh I'm actually talking to long-term investors I'm not talking to traders to short-term investors I'm talking to people who have money who are able to lose that money and be okay and they have a long-term Horizon Now if you're that sort of person and Tesla is very, very interesting. I'm not gonna lie, look at the numbers here and they have some of the data here. It's very interesting. So this stock is phenomenal.

It has 21 billion in Revenue in the previous quarter It produced 350 000 cars last quarter and it's it. Beat expectations again. seven and a half percent beat above expectations on revenue. Ebitda is up 68, revenue is up 56 percent.

I mean the EV Market The global EV Market is expanding even though they have more competition. but there's more. you know, more time, more total market. So how low do you think it will go in the recession? Will it take a hit? Most likely I Mean it's probably not going to keep growing like this if the market is going to go absolutely soft.

But ask yourself this question: if we are talking about a 20-year strategy, who's going to be around in 20 years and who's going to be actually dominant? Is it going to be Ford or GM or any of these companies? Or it's going to be Tesla It's very hard to build an argument why Tesla is not one of the best companies in the world right now now. You might make an argument that Tesla's stock is too expensive. You might make an argument that the recession is going to wreak havoc on its supply chain and its demand. You might make an argument that the stock might drop lower and you will be able to pick it up cheaper of this.

Maybe or maybe not true. Actually, a lot of it makes sense to me. But here's the problem. Nobody really knows.

and if you're selling right now, if you're an existing shareholder, you're selling into fear. and essentially what you're doing is, you're putting yourself in the position of not ever re-entering again because when you sell into fear, when the stock actually starts going up, it's always going to seem too expensive to you until it's too late. That's what happened to people 2000 2008 They sold out because of fear and they never jump back in because every time they looked at it, it looked way too too expensive. They waited for another dip that never came.

I Think trying to time this company is just not a good idea. So my advice to you is very, very simple. First of all, think of yourself doing research. definitely do not.

you know, make any trades or Investments based on whatever YouTuber says, whether it's me or anybody else, whether they like Tesla whether they hate Tesla So that's the most important piece of it. Now, if you do not think that Tesla is a generationally great company, at least like a top five company in the world right now, this is not a good time to speculate on the stock. Simple next two years is going to be rough. If you think that this company is probably I would say in the top five companies right now to invest in and you have money to lose which is not going to bankrupt you and you're willing to stay the course for the next 20 years, then this is a very interesting opportunity you should look into.

Of course, at the end of the day, there may be other opportunities for you maybe the index, maybe the S P 500. But all I'm saying is that the fear I'm seeing in the market right now as far as Tesla stock seems to be more psychologically driven than anything fundamental, even though you might make an argument about a recession slowing down Tesla but how much do you think is going to slow down? I Mean this company is kicking. But do not make a decision based on psychology or fear or greed. It's always a bad idea to fall more into a stock and this is a bad idea to sell into panic.

Try and analyze the stock fundamentally and try to figure out if this is a good investment for your 20-year plan based on what it's doing, based on what is planning, based on the numbers, look at the ebitda, look at their financials, look at their plans, Try to figure out what they're doing as far as their Tam expansion, more plans Battery Technology Production technology If you want to actually research the stock in depth thoroughly. I Highly suggest that you use the tool that me and my partner paid built especially for ourselves. a tool that allows you to do all that on any specific stock especially a Tesla this tool if you haven't heard about it I've been talking about it a lot and this is my baby. We built this.

it's called stock MVP on stock of EP You can do everything I ever wanted from One Stop Shop platform which I never found for myself which is look at the financials, look at the highlights Deep Dive into what the company is actually doing, look at insiders, look at politicians, look at institutionals run your own DCF When sensitivity analysis based on different categories different growth rates do all that. and because it's New Year's we have a special code called New Year 23. It's going to be below. It's going to give you three months at 50 off.

In any case, if you try it out and you're not happy with it, just let us know we'll refund you money within 14 days. no problem at all. I Hope you enjoyed this video. It was a little bit different.

I Try to keep it light and simple. no hate to Kathy Wood and her by Arc and never pay capital gains tax again I was just kidding around Kathy I'm sure you'll pay a lot of capital gains in the future, no doubt. In any case, have a great New Year's see you next video.