Uh Yep this is usually a sign of the bottom. Oh man, everyone is pissed at each other. Ross Gerber is fighting with Elon Musk I Hate it when my daddy and my step bro fight with each other. It's gotten so bad that Bloomberg is literally covering the fight between them on Twitter It's not even worth covering because honestly, nobody knows what the hell is going on.

What I do know though, is what's going on. Okay, I'm kidding. I'm gonna give you my best estimate. Okay, because see, let me give you a quick background here.

Elon Musk is like oh well. when the risk-free raid on bonds goes up, then it then people statistically sell uh you know, uh, stocks because uh, you know they can make money on bonds and stuff and then uh, Gary Black steps in. he's like dude, if that were true, then NASDAQ wouldn't be down like one to two percent while Tesla's down like 53 in just three months. Okay, okay, thank you bye, it's a problem.

It's a problem. Okay, but again, I don't want to get involved in the drama. What I'm going to talk about is what I believe is causing the Real Pain that's happening and I'm also going to tell you what I'm doing about it mostly because Tesla is a pretty big position in in my portfolio and um, cheers to that. Um, what is this? ah Gentleman Jack hmm just doesn't do it like Tesla tequila but this was on sale.

so what's going on? The second largest by volume day traded for Tesla and it's either because Elon sold which is unlikely because we're pretty sure we're in a blackout period here before earnings coming up in a few weeks. But the real number one downtrend baby. It's that simple. We are in a massive downtrend for Tesla and guess what makes that downtrend? Continue people making profit, shorting, or having puts on the stock because it's extremely profitable.

In fact, we kind of just broke that downtrend to the downside. You could see that here and that is not good. That just reiterates the selling pressure. Take a look at the volume today though.

look at the movement today. I Want you to see this in my Trading Group I mentioned uh, that hey, after a big drop like this and a channel, we're probably going to see a break up or break down and I hate to say it. but folks, look how solid that channel was and we were charting it from here, we're like oh, it's a channel. Oh no, it's a down Channel Which way is it gonna go? Well, it's bearish.

Oh oh yeah. okay down. Trends beget bearish tendencies in English When stuff going downhill, you put your little kayak on top of the stuff going downhill and you go When you're the guy that's like nah by the dip and you're trying to go up the sewage. You're like this right? like it sucks, You're fighting the trend.

This is a downtrend. A downtrend has nothing to do with the fundamentals of the stock Zero. But I'm not here to talk fundamentals to you because I've done that in other videos and this isn't a video to preach to you about fundamentals. Honestly, if you're even watching this video, you already know the fundamentals of Tesla are strong.

You don't need to be convinced by some weenie telling you that and test this valuation is still too high. Really? really? A company with over three billion dollars of a free cash flow, potentially investing 10 billion dollars into a Mexico gigafactory to manufacture a lower cost vehicle, Growing earnings at 50 percent per year, even at minimum 40 per year? My goodness, that is a company that's overvalued. Okay, well, maybe we'll have to have a talk about Peg ratios in the future because maybe there's a disconnect. But again, this video is not about fundamentals.

Let's instead consider the second potential reason: A lot of people have made a lot of money on Tesla over the past years. Unfortunately, people are making less money right now. That is the nature of a recession. In a recession, people make less money.

You earn less money on side hustles, You earn less money at your job, you get less promotions your other stocks don't do as well, and you kind of want to keep spending, right? So what do you do? you finance your lifestyle with your biggest star? Colton Called Tesla Now that's either financing your taxes or financing other. Acquisitions Maybe you're buying a house. Maybe you're buying a boat, a car, or a plane. Or you're investing in a business.

In my case, I'm putting a lot of money on bets on my startups and so I had to sell a little bit of my shares. But that's just to make sure that I could finance my business startups and what I need for my business startups going forward. But look, I'm just like you. You might have your own reason.

Maybe you're buying a house. Maybe you have a business startup. Maybe you just want to make sure you have enough money next year in case you get laid off. Maybe you want to do the third reason.

tax loss. Harvest I'm not here to elaborate why it makes sense to sell your stocks now and potentially re-buy them. Uh, you know, after earnings next month? You know. In fact, you could.

you could even sell your stocks in Tesla Now re-buy them before earnings next month if you really wanted to. and probably Buy in that uncertainty dip we often get in front of earnings. but I'm not going to tell you that Tesla's going to be cheaper in a month from now. So if you get screwed, it's your problem.

Okay, like I'm not giving you that kind of advice. Uh, you know, and when we talk regularly, we have these sort of discussions in my course member live streams. Remember that's the only sponsor of this channel is you know, whether you follow me to do uh, you know to learn about all my insight, my fundamental research, my understanding of the market? uh or you just want to follow me to do the opposite? It doesn't matter. You can do that.

Join the programs on building your wealth link down below. Hey, you know what? if you win on both sides, that's a win. But what am I gonna do about it because I can't fight a downtrend? I Also am done selling, you know I I Want to be clear? I'm going to tell you about my position on Tesla in just a moment as well. Uh, but um, you know I I don't really care about the downtrend I have uh I I don't need any more money for financing uh, my business, uh, plans.

uh and I'm done with tax loss harvesting. So what am I gonna do about the rest of the situation going on with Tesla Well, I've analyzed this uh, quite in detail over the past few days uh, and significantly today. But even over the last few days, you know I've looked into short-term calls. Short-term puts volatility on Tesla Unfortunately is very high right now and put to call ratios are extreme so puts are extremely expensive.

Short and long-term puts extremely expensive right now. Easy to get hosed on these but short-term calls even though their cheaper volatility is still elevated on Tesla And today with an eight percent down day, Oh yeah, volatility jumped on Tesla Selling calls maybe would have been more interesting, but you want to be careful with that because that one day you snap back and then you get called out and you'll be sad. Although that might be okay with you because then you might want to diversify diversify into like an actively managed ETF that has high exposure to Tesla Who knows I decided that for my portfolio, short-term calls short-term puts for the bulk of my portfolio. probably not the right option because I have a lot of shares, right? 60 to 70 000 long shares? uh of Tesla So uh, then there's the consideration about long-term calls or and potentially deep in the money calls.

I Mean you could go all the way out to 2025 and pick up some 600 out of the money calls. You could pick up some hundred dollar in the money calls. The problem is in the money calls are very expensive because you're nearly financing. you know, two-thirds of the entire stock.

Uh, or paying for two-thirds of the entire stock and you're not getting that much upside, leverage, and the out of the money calls. If you just trade sideways for a few months, say goodbye to seven percent a month while the stock is trading sideways and in this environment. I Don't know that I Want to make any kind of short-term bets that the market is going to V-shape recovery Like Larry Kudlow this ain't a V-shape recovery Larry cud low time so I'm not the biggest fan of making bets on options right now I am a big fan of playing volatility trades. In fact, I've got a special volatility trade that I'm planning on going a little bit deeper into tomorrow with the course members and this is a volatility trade where I found volatility is extremely low and there's some really cool opportunities to take advantage of this both on the short and the long side, so we'll be talking about that a little bit more tomorrow.

I Like volatility trading better than just trying to YOLO in One Direction or another and I have found I will say I Have found that if you have a bearish tilt so you're trading in this market, you're probably going to win seven out of 10 times, whereas if you have a bullish tilt, you're going to win three out of ten times. It's unfortunately just the way the market is right now. but we'll see we have some good earnings from Nike and FedEx uh or some some at least surprises. So so we'll see.

So what's my answer for my portfolio? What's what's ultimately the answer? Well, the answer is personal for everyone, right? But my belief is that there is no cheaper option on the future value of Tesla than shares of Tesla I Know that might sound boring, but I believe that my 60 to 70 000 shares of Tesla could potentially be worth five six hundred dollars a piece with a fair and a reasonable valuation in potentially less than three years. And I'm willing to make that bet without exactly betting on the timing. See, if you choose options, you have to bet on the timing because the volatility, the volatility could screw you. If we go into a low ball period, you're screwed trying to sell your options.

We go into a high ball period and all of a sudden prices are down. Which often when Vol goes up, prices go down well. then you're screwed too. Uh, Whereas if you hold options uh, or rather, you hold chairs rather than options, you're not subject to the whims of Vol right volatility or the whims of Theta Decay.

So the cheapest optionality on Tesla is Tesla The Tesla Shares are the cheapest way to own Tesla right now in my opinion, if you already have Tesla shares, if you want to tax loss, Harvest I Do think there is a benefit to moving to an actively managed ETF that has a large exposure to Tesla because when and if Tesla does hit those targets, it'd be nice to have those gains built into an ETF that can then rebalance without passing long taxable gains to you. That's a big consideration, because consider this. If Tesla goes from 140 today to 600, let's say that's a 4.6 X and on a 4.6 X If you're going to end up having to pay, you know, call them long-term capital gains of uh, 30 or whatever. You know you're going to be giving away one of those about.

well, probably 30 percent of that. So you'll be down to about a 3.2 x, right? Whereas if an actively managed ETF can balance that out for you and diversify some of the risk that might still happen to the downside, then there could be less pain in your portfolio. But the other thing you could do is you don't have to go all in on either. Direction You don't have to go all in on Tesla You don't have to go all in on and I certainly would never recommend going all in on Tesla And you don't have to go all in on one actively managed.

ETF You can diversify. pick some ETFs pick some single stocks if you want. But my belief is that what we're seeing right now is the definition of the market can remain irrational longer than you can remain solvent. And if you are deep in margin, you're probably selling out of panic right now.

and that makes sense. There are two reasons to sell right now. Either you're minimizing your margin or you have opportunities that you need to make sure don't disappear because your stock portfolio it was going down. That's as simple as it is.

Now, if you have to pair a little bit of your portfolio. to do that, that's okay. That doesn't make you a paper hander that doesn't make you. you know, weak.

that makes you smart. you're You're minimizing your risk and maximizing your potential to make sure you could still get through the next year. But do I think that the best move for me is oh, dump all of my Tesla shares because they're down so much. Oh my Gosh.

Oh what a clown. Wow. his stocks went out like I I don't have a magic eight ball I can only look at the fundamentals of Tesla and tell you they are God beautiful Godly Beautiful. That's it.

That's all. I Can tell you, that's it I cannot move the stock. That's it that. it's that simple.

So we are facing an ugly downtrend. People are financing their 2023 people are tax loss harvesting. I've done some of that as well I actually think after I probably will after my 30 days right before earnings I want to buy Tesla if we have a nice little dip before earnings again which we might and uh and then I'll be back to uh to hopefully the share position where I was previously. So uh, I'm optimistic I Realize the pain is very, very high right now, but this is what retail capitulation looks like and Retail is getting screwed here.

Tesla is a heavy, heavily owned retail stock and people are losing faith. And it's unfortunate, but when people lose faith it's a sign of that irrationality. unfortunately that comes with Market pain and stock price is going down. People look at their portfolios, get emotional and sell, and sometimes they sell completely out.

That's not me. I Am not leaving. Thank you so much for watching I got some uh gentleman's Jack to get to. Thanks bye.