Okay folks, so today we've got our eyes on one of the most talked about dumps and missed expectations in the market this week. Tesla We are going to do a deep dive into the reasons why she sold off the bull and be case for and against accumulation, what price she's likely to drop to, as well as some things that you might just have missed. And the only thing I ask in return is that you hit that ravishing like button and also don't forget to subscribe. The doctor says the best prescription is often times a subscription, so if you're feeling a little sick, don't forget to push that button.

Okay folks, so this is the third quarter in a row where Tesla stock has has fallen on quarterly earnings and one of the immediate surface level reasons that Tesla Stock took this hit despite reporting record-breaking deliveries. Well, Tesla Stock fell short of Wall Street's predictions in other categories Tesla missed 4.1% on earnings per share and 2.32% on Revenue Now of course, when any company fails to meet Wall Street's expectations, it throws that company into a mass amount of uncertainty and the stock tends to sell off. But with Tesla you get a multiplier of that because of how much growth and optimism is baked into the stock price. But the bigger problem here and what are concerned about is not the myth, it's the message that is being sent about medium-term growth.

Tesla is now portraying its next growth wave as far in the future expensive to get to, and is essentially ditching any sort of optimism on growth targets Until that growth wave comes from the Wall Street Journal quote Tesla warned of notably slower growth in 2024, and its profit margin took a hit in the fourth quarter, signaling more uncertainty ahead for the world's most valuable automaker and the broader electric vehicle industry now in 2023. Tesla sales volume increased 38% over the prior year, and for several years Tesla has been aiming for 50% on average. So when they're saying notably slower growth from that 38% drop which was supposed to be 50, well, that's obviously freaking out a lot of analysts. And while Musk himself said this week that having high compounding growth forever is impossible while many analysts were buying Tesla based on high growth in the coming years and and they aren't happy, problem is that they are missing the bigger picture and I'll talk to you about this in a second.

But why is Tesla due to experience slowing growth in 2024? Why? Well, the the main reason is that they are preparing to mass produce their newest, most affordable model which is going to have far smaller margins and cost a lot of money to build out the infrastructure for and it isn't going to be out until the end of 2025 at the earliest. On top of that, many of the investors that have long been concerned about the massive price cuts for Tesla's already present models in varying markets Well, their concerns at this conference were met with talk of grueling and expensive production ramp ups that will take place until the end of next year. So again, they're very, very unhappy from Tesla. Our company is currently between two major growth waves.

The earnings report said the first one began with the global expansion of the Model 3/ Y platform, and the next one we believe will be initiated by the global expansion of the Next Generation vehicle platform. And that is the story right now. Right now, Tesla is portraying a growth Purgatory Until until that car starts really rolling off the production facilities. So accordingly, you have some investors and Traders and big money managers thinking, okay, if Tesla's at the tail end of its last growth wave with the three and the Y and it's got another year of bad results until the next gen vehicle platform comes out and starts expanding, well, why not sell out now, lock in profits and and buy back in in 2025 once that starts rolling off the Lots Now to back up.

We have seen this before in Tesla's history. In 2017 and 2018, Tesla almost collapsed under the weight of scaling up to meet demand for the Model 3. As orders piled up, the company struggled to increase its manufacturing capacity. The complex manufacturing process, including the development of new automated assembly lines caused delays, quality issues which really really dented the brand image of Tesla.

Tesla was unable to meet its production targets, frustrating customers, and really, really pissing off investors. This resulted in Miss Revenue projection after missed Revenue projection and seriously damaged investor confidence and completely embolden Shorts. This resulted in Tesla being one of the most shorted stocks in history. And so when investors are in this new cycle and are hearing about this new 18 to 24 or month so period of scaling up for the next affordable model, Well, obviously it makes sense that some people are going to be freaked out about this happening again.

They might not think that Tesla's going to collapse this time, but but they do see a massive, massive amount of expenditure about to go out. Expanding manufacturing capacity is an absolute Capital nightmare. No matter how rich your company is, it takes a ton of money and completely bludgeons your earnings reports for a very, very long time. Which investors are thinking is going to blunt Tesla's stock performance and is why they're pulling.

In 2017, Tesla reported a net loss of over $2 billion. Additionally, at that time, the company faced a substantial debt burden which increased the pressure on generating positive cash flow. Investors in this cycle are indeed looking at Tesla differently than investors in the 2017 2018 cycle. They certainly don't think Tesla's going to go bankrupt right now, but they also don't want to stay for what they think is going to be a prolonged stretch of stagnation or further downtrending.

But how true are their fears? How true is this prediction? Well you look at the era where Tesla was ramping up production in 2017 and 18. Tesla stock basically ran split, adjusted of course, back and forth from 16 to 26 bucks over and over again. Tesla Stock didn't go straight up, it didn't go straight down. It was back and forth for 2 years as the bulls and bears fought it out.

and we are likely do for the same deal this time around with huge accumulation opportunities at Dips and then rides all the way to the top. And so the reason that I'd pay attention to Tesla right now is because we are getting to multi- quarter lows, not multi- quarter highs. Which means that if you're looking at previous history, multi- quarter lows are the opportunities to accumulate, not the opportunities to pile on the fear you continue to see Tesla stock sell off to6 6150. and from a technical standpoint, it's going to be hard to argue that this isn't a solid deal for a pickup.

Of course, you got to be careful because Dips can keep dipping as long as markets aren't capitalizing and investors don't have the patience. But at the same time, after this ramp up and all this fear is over, well you're going to be on the other side and it's going to be like wow I Wish I had acquired at these prices. Now obviously from a trading perspective, you want to see a little bit more proof of concept. You want this to run down to 150 and then start showing some bouncing off that bottom.

From a accumulation perspective, you just want to get a good deal. So you got to ask yourself, what is your game plan with this: Are you investing medium to longterm? Are you trading it Because each of those has a different strategy. Now that being said from a bigger picture: I Believe that the way that investors are looking at the stock right now is missing the forest for the trees. Of course, no one knows how long it's going to take markets to appreciate the opportunity.

With this new model that's coming out, markets might really start pricing in this new car mid production or a year after production. Anytime in that time span could be appropriate for Tesla stock to start factoring it in. And it's almost impossible to predict. In the leadup to the Model 3, and even throughout the Model 3's production cycle, you had a lot of people saying No this Tesla Model 3 is a huge mstep.

It's going to cannibalize the Tesla brand. It's going to cheapen it. It's going to collapse its manufacturing capacity. And yet that Model 3 was a massive, stinking success.

But markets didn't appreciate that for a long time and certainly not consistently appreciate it. So the play with the Model 3 was to buy at accumulation lows. You buy your support when people are dumping and And You start accumulating as it goes back up and and then you sell at resistance. or if you're a long-term holder, you can continue to hold and this time around I Think you can make a pretty solid case that that's going to be the repeat story here.

Plus I mean when this new car comes out, not only is it going to be much more affordable, but you're likely going to be in an environment with much lower rates. Tesla is going to be able to access a much much bigger Market Not only will they have lower borrowing rates, but but a lower priced vehicle. And of course, this says nothing about the opportunity that Tesla has outside of its car segment. The potential with AI and Robotics and self-driving and whatnot is going to be the biggest driver of Tesla performance in the long term.

Right now, investors are very very much focused on the car segment because it's the majority of Tesla's business and that's what the business is really in the here and now. But as time goes on, you'll see more and more concrete progress in other segments and the whole Market will rethink Tesla again if you look at some other companies like Microsoft or Nvda, They're very, very very big money makers in the here and now. But the reason they're running up so much more than could ever be justified based on their current money-making ability is because there's so much AI getting priced into the stock years in advance. Eventually you're going to get into a cycle where Market Market start really pricing that into Tesla once again and that is going to be unbelievable.

It's anybody's best guess when that's going to happen, but history is pretty clear. If you buy at a good price, you tend to get a good return over time. Right now, it's yet to be seen how far this fear stretches for Tesla. But in a market of recapitalizing stocks, and in a market where Tesla is already the worst performing stock in the Magnificent 7, it's hard to imagine that Tesla sells off significantly more I'd argue At worst, you get a test of that 150 support, which means anytime between now and then is accumulation territory for the next upswing.

Do you agree or disagree with my analysis here. Do you think that Tesla is overvalued garbage? Or do you think that markets are missing something big here? Well, you can let us know down below. Anyways, that caps off today's video. Have a killer weekend.

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