Welcome back to another meet. Kevin report today is February and 9th it is a Thursday and we are on Meet Kevin report a number 18. thank you so much for joining again! Okay, lots to talk about today. Consumers Inflation: What the heck is happening in the world politically? what's going on? First of all, a few um.

condolences first of all: Senator John Federman is Democrat he is in the hospital. Uh, potentially there's some rumors that he may have had another stroke he's previously had a he's previously recovered from a stroke uh, and now he's in the hospital again, so obviously best wishes to a speedy recovery There Doesn't matter if you're a Republican or Democrat nobody deserves uh to go through health issues. Unfortunately, many of us do and there are many of us who are unfortunate uh and uh and then uh, you know, suffer from ailments. No people don't deserve to.

So I I really wish the best for everyone and knock on wood that everybody can recover healthily from any of the issues they have. Unfortunately, Then you have to look at turkey and Syria you've got uh, nearly 14 000 dead now thanks to the earthquakes. Uh, it's just absolutely terrible and and I think what's uh, additionally devastating. I Can't say more devastating because any loss of life is already devastating.

It it? uh, it always hurts me. Um, is is that right now we are entering the phase? As as you're listening to this, we are entering the phase where some people who are actually alive under the rubble of collapsed apartment buildings and homes. We're sitting at their breakfast tables or their dining tables or couches or beds working in their offices. uh you know, maybe on their laptops just like uh, we might be right now uh are are suffering uh without food or water now for coming on uh, over 48 hours and unfortunately that is not good.

Uh, there is uh, the time is against everyone under the rubble right now and and getting uh getting emergency support and Aid to those in Turkey is not easy especially since Turkey has been suffering from the massive governmental upheaval over insane levels of inflation. I mean we're talking 80 to 90 percent inflation down to a a low of 69 you actually had Twitter that was banned in Turkey but the ban being lifted just yesterday. As folks see Twitter potentially as a communicating tool for this emergency which is is terrible a that it was banned in the first place and obviously B uh the the uh earthquake issues uh or are so devastating but it's it's something something to remember is a lot of people make fun of. uh you know the the building requirements that exist for example here in California uh and I know a lot of people that come from Florida or from Europe and they're like uh and I'm talking more like western parts of Europe and they're like Kevin why your homes are built out of wood out here this that's in insane that seems so cheap You know we build homes out of cinder block and brick and I'm like yeah well you deal with hurricanes and and you know there's always this belief that oh California builds homes cheap And one of the things that I've learned in construction is one of the beautiful things about wood is that it is flexible and it can move.

Uh, but the the amount of building standards that go into earthquake retrofitting in new construction today versus old construction is ridiculous And this is by no means to to say that Turkey made any kind of mistakes. We have old homes here in California as well in earthquake zones that are not earthquake retrofitted. I mean we have homes that sit on foundations that are basically just stacked blocks. uh, and and a home could easily fall off of those foundations in an earthquake.

But you look at some of the new construction that's built now and what goes into uh, earthquake? uh, support uh for for these structures is incredible and you just you just don't have that in Old buildings let alone in Turkey. And so so these these things, they just collapse and it's so terrible. so it's it's pretty devastating. So I wanted to start with that today.

Uh, moving on and sort of on the note of Twitter. Apparently Twitter has around 290 000 subscribers for Twitter Blue worldwide. Now this is from Uh, the Informer 62 of those are in the United States. So about every six and ten, it is worth noting that Twitter Blue just released the option for you to uh, tweet a long tweet rather than these 140 character limited tweets.

Now this I've actually really enjoyed. Uh, you should follow me at realmeetkevin' on Twitter and the first long tweet that I sent I would love to share with you here. Uh, it is the following. Finally, long tweets.

Threads suck. and it's true. Threads are like terrible. absolutely terrible.

Uh, you try to read the Twitter files and you go through the threads. You get confused in terms of which. wait, wait, you're on number 13 where number 14 go and you click over there. Oh, there's 14 over.

wait. Why 17? It is a disaster. So finally, long tweets are here. So I uh, you know I've been.

Uh, this is my first long tweet here. so uh, it's it. just repeats flip-flopper over and over again. You know I'm doing sort of the the what's it called Uh, you? you gotta, you gotta have your punishment right? So you have to write on the board 27 times what you did wrong actually.

I Don't blame myself for being a flip-flopper. I think I'll always be a flip-flopper. But the nice thing is uh, anytime I flip-flop you can see that transformation here. and you could watch me flip flop and it costs you Zero.

You just press the little subscribe button and you can watch me flip flop In fact, if you want to get notifications for my flip-flop you can download the totally Free Meet Kevin app in the Apple or Android app store. By the way, we are working on an update for that app, so that way you could choose what notifications do you want normal videos, live stream videos, or short content. So I think that'll be really cool. So stay tuned for that.

uh, activation Blizzard and just had the United Kingdom's Anti-Trust Regulators come out and suggest that the 75 billion activation Blizzard acquisition by Microsoft would end up hurting gamers in the United Kingdom dealing another blow to Activision This was actually a play that for a while Warren Buffett was playing as an Arbitrage bet. although it seems that recently he's been reducing his position and exposure to this thanks to the regulatory concerns. Keep in mind that the FTC in November sued Activision Blizzard Microsoft to block the deal. Yikes.

Canada Solar potentially poised or Canadian Solar I should say uh, Poised to grow faster than Piers in 2023, With potentially sales exceeding expectations, the solar industry has been pretty dang resilient. Uh, although we'll see if we end up seeing any kind of softness going into. uh, the rest of 2023 is the housing market potentially starts showing some red flags. We'll talk a little bit about end phase and their earnings a little bit later in this video.

China is cutting rates again for homes and one of the crazy things that's happening in China And we won't go super deep on this, but I Want to just sort of give this little uh indicator here. One of the things that I'm noticing happening in China is people are very skeptical to to spend again I Don't get me wrong, they're spending on travel and entertainment, but they're very skeptical to spend on goods and real estate. And that's very interesting because real estate is the bulk of the Chinese economy and uh, consumerism is only about 32 percent of the Chinese economy. although that's expected to substantially rise this year given the real estate slow down.

But boy, you know you're in this really weird situation in China where I I personally believe and I think the Chinese are pretty smart for this. I think the Chinese realized when the lockdown started. they're going to have to save their own money. They're not going to get helicopter money like we did in America and they did so very well.

But in addition to that, they don't necessarily trust the idea that you should just go out there and jolly. Lolly Spend everything and if something bad happens, the government's going to come bail you out again because a the government didn't in China and B the government probably won't. So pretty incredible. Uh, because there are obviously a lot of fears that China's reopening is going to lead to this surge of inflation.

But so far I I Don't know. You know, it doesn't seem like that. Uh, reopening is materializing uh, as uh, as as well as it potentially should. So, uh, wild.

Yeah, we'll talk about that end phase. Best earnings report Ever! Kyle It actually wasn't the best earnings report ever. But stay tuned. I'll show you exactly why I know why headline it might seem that way.

So you're not wrong to say that some of the headline numbers were the strongest ever. Uh, yeah, yeah, you know. I I don't I don't know that you could blame, uh, cheap construction I Don't think you could do that? uh I Think you? You have to remember that. Uh, really.

even in the United States before the Uh Northridge earthquake. Just you know, 30 years or so ago, the earthquake standards here were not that great. You know any home built in the 1920s, 30s, 40s, 50s, 60s, the it's earthquake standards are not very strong, so this is not a matter of cheap. Construction In fact, people say homes were built expensively in the 1950s they used Redwood after all which is termite resistant.

Uh, it's It's not a matter of cheap construction, it's a matter of the minimum. Building standards were just not elevated uh to to the levels that we have today. Until quite frankly I would say the last 25 years Uh, you know I live in a 2008 home and I feel very grateful That I live in a 2008 home it has fire sprinklers. It's extremely, uh, earthquake retro? Well, not retrofit.

It was built to a very high earthquake standard. Uh, and that's not to say I want to be in an earthquake, but let's just say I feel much more comfortable in this than what I used to live in which didn't have insulation in the walls, didn't have fire sprinklers. uh, you know, my first home uh and didn't have retrofitting uh for earthquakes so you know it's oh, you lived through earthquake Ouch. Uh, it says Armando here.

Yeah, uh, but yeah. Mustafa you know I I can't say that it's cheap construction I think it's just old construction, you know? and I think when we look at today's building standards versus the old stuff, it's like wow, that's how you guys did it back then. it was bad. You know it was really, really bad.

Oh so all right now we've got to talk about uh, this. and and I think, uh, very. We're not going to spend a lot of time on this. This is going to be very brief, but I find this very interesting and I'm mostly opening this up because I'm very curious to see what your commentary is on this later, so stand by for one second or current.

All right. Oops. So Piers Morgan had a piece on his show talking about a child a grooming. This is basically where sex is taught to children under nine years old and I just want to know what you think about the blonde lady's response.

Okay, wait for the blonde ladies response and keep in mind I have a seven-year-old and five-year-old and they don't need to know about Sex Ed at this age. Okay, but I just want to hear what you think about the blonde girl's response because in my opinion, it's mind-blowing. As a parent that somebody would say that. But, but let's listen in here for a moment without being proud to be gay.

Yeah, tolerance and understanding. but not at four, five, six seconds. Aside from all of this, we actually teach sex quite explicitly in heterosexual relationships from a really young age. You actually have children in Nativity plays where you're playing a mother who has an Immaculate Conception and then gives birth to a baby.

What are you teaching about? Yeah, you gotta be kidding me. Her argument is that oh, teaching sex to young children is already normalized because kids play house. What kind of crazy, cracked up argument is that? Sorry. I had to get that out of the way.

That was just like I saw that and I basically vomited. Uh, I'm like my kid's playing house is not them learning about sex. it's them playing house. Okay, mommies have babies.

That's what they do. That doesn't mean they're now fully sexually groomed. Ah, sorry. So some of some of the things that we're going to touch on I just get somewhat angry about and I'm sorry I have to do it.

Um, all right. Anyway, now. oh, here's another thing I could get angry about because that's just the way it works I Guess Uh, Okay, so look okay. Okay, so Homelessness Homelessness is such a disaster in California and the California government is such an abject failure that you will not believe what LA county is spending on homelessness in 2023 and you won't believe how many homeless there are receiving that number.

Now it is absolutely ridiculous before. I tell you how ridiculous that number is I want you to consider for a moment my insane as I was called I was called insane and I was called. you know, like a militia man. I was called crazy things about locking people up or whatever which is just insane by the way.

But I was called crazy things when I ran for governor in 2020 because I had what I thought was an incredible plan for solving homelessness. Imagine my plan quickly for a moment. Okay, first of all, how about this emergency and immediate support for mental health? How about starting there? How about actually making it so that a homeless person who wants to talk to a doctor doesn't have to go in a six-month queue? And how are they going to get through the general care process and then get to a mental health professional in Los Angeles they don't. It's impossible because a you're not even capable of getting yourself there because you don't have any money and B even if you did, you have to wait six months and by then who knows how many drugs you've taken.

It's absolutely disgusting. Living on the streets in California is extremely dangerous. You are substantially more likely to die living on the street than if you're not living in the street. That should be obvious.

But let me put it this way: you've probably got a murder or death rate amongst the homeless population around 15 to 20 percent. When you walk through your daily life, you don't walk around thinking I've got a 15 or 20 chance of dying today. Okay, that's what the homeless population has to deal with. Now don't get me wrong, there are a lot of issues that lead to homelessness that need to be solved.

We need more housing and California we need eviction support services that are much more robust and capable rather than villainizing landlords. We have to recognize that a lot of the population in California thanks to the terrible California school systems which rank 40th out of 50. that's bottom 20 by the way, in the United States Uh, maybe people are just undereducated and just don't have the opportunity to actually get out of a state of economic despair. So so when you start putting the piece of the puzzle together, you realize when I ran for governor in California I ran under the premise that you know we need to solve the causes of homelessness, right? We've got to solve the education disparity.

We've got to solve the economic Gap We've got to solve the lack of Housing And these are all things that can be solved. We can build more homes very quickly. We just need a governor that will actually lead the charge, not the kind of Governor that we have now. Who says things like hey, we want people to be able to build more accessory dwelling units and we're going to mandate that cities approve permits within 60 days so that homeowners can turn their garages into accessory dwelling units.

Governor Says that Guess what actually happens at the city level? City says yeah, We'll review your paperwork for two years and we might deny you because you might be in a fire zone. Oh wait, all of California is in a fire zone. Guess we ain't doing adus whoops. And what does the Governor do Nothing because he got to go to the Google campus and talk about how great it was that they were passing Sb7 and all these bills that suggest all housings can be so much easier in California And what practically happens? God-awful Nothing.

Because the government of California is an abject failure. And it ha. It's not because the people. It's not because of the bureaucrats.

It's because of the leaders. The leaders don't have any balls because the people who try to run for governor in California The exception of me because I wasn't born in America and I can't do it. Usually they try to end up setting themselves up to run for president. so they set themselves up to run for president by basically coasting through the governorship in California not rocking the boat like Mr gavinosum so they could end up running for president and then guess what happens in the meantime all the judges want to be your buddy in California because if you do end up becoming president, those California judges want Federal appointments.

or maybe maybe they could even get to the Supreme Court So the system is highly highly broken and look, I'm not Mr tinfoil had I Think many of you know that I'm so aggressively in the middle and uh, you know I consider myself a JFK a style Democrat Although even saying that these days pisses people off I like to say I'm 51-49 Okay, that's what I like to say republican Democrat Democrat will probably whatever in the middle now. What is really incredible about that is listen to sort of my idea here or on homelessness and then listen to what's actually happening. Okay, so in addition to solving for housing, mental health, and obviously Support Services like being able to provide medical care for people and also fixing our school system by actually teaching people trades or white collar professions so they can graduate high school, being capable of functioning in our economy rather than floundering debating. Do I want tens of thousands, tens of thousands of dollars of student debt Or do I actually want to start working at 18, right? That should not be a question.

You should have the skills you need at 18 to get a job that you could live off of. You should be able to build a career at 18. that's what we were going to build. But anyway, I didn't become governor.

Got almost a million votes though and came second place for the recall candidates. But anyway, my plan for homelessness was very, very simple. In the areas that we have homelessness which what's crazy about this is some people are like wait, you can't do that in our areas and I'm like dude, you have all the homelessness already. But anyway, in the areas where the homelessness problems exist, we create emergency facilities that provide everything you need a bad food.

uh Medical Care like triage style Medical Care Obviously I mean if we could have onside mental health grade as well Uh, provide all the services that you need if you fall into the level of Despair that you have to sleep on the floor. but guess what? There's only one. There are two two big rules. Rule number one is you can leave anytime you want.

These are not like handcuffed facilities. These are not places that you have to go to And then of course people respond and go well. why would you go there Then It's simple because their second big Rule and this is really what I call the number one big rule is Nobody Sleeps on our streets in California Because when people sleep on our streets, they dramatically increase the likelihood of dying. They make other Americans and Californians feel unsafe, They hurt tourism, they hurt our economy, and they hurt the mental health of the individuals who are sleeping on the street.

And they increase the drug problem that we have on our streets. And they increase the mental health problem. There is no good that comes out of sleeping on the streets in California So my plan says look, you don't have to go check in, but every time you fall asleep on the street, you're going to just happen to respawn at one of our facilities. And that means either you come with us or you start walking on your way or we take you there.

It's very simple and hey, we can take you there, have a bagel, brush your teeth, take a shower, pop on some you know, donated clothes or whatever, and if you want to go walk all night long. Fine. but if you fall asleep you could go right back and it would be challenging. Don't get me wrong, the first few months of this would be difficult and we would do it with the National Guard for the first few months.

But guess what? I promise you within six months there would not be a single person in California sleeping on the street or dying on the streets anymore due to homelessness because people will realize damn, if I could go here and have a bed and have food and a shower and close, why would I sleep on the floor. Especially if they're just gonna bother the crap out of me and pick me up and keep throwing me in here. And they can get up and leave all the time they want. And the idea then is what have you done.

You've centralized the homelessness problem. Now you start solving why people are falling into homelessness. You solve mental health, You solve the housing, You solve the education. That's going to take a long time, but at least immediately now you've concentrated where everybody is and guess what? Oh hey, good to see you again Robert Hey by the way, you know so and so is coming in today.

They've got job opportunities paying 17 bucks an hour. if you're interested, they'll be here at 10. And guess what? you actually can now centralize the support services to try to reintegrate people in the economy. And don't get me wrong, not everybody's going to look at that and go yeah, Okay, I'll work.

Yeah and not everybody's going to want to do that. There are going to be some people that might never leave. sort of the the Trap of homelessness, but listen instead to what California is doing. As of September In 2022, the latest homelessness account for LA County is 69 144.

California has accounted for 30 percent of the country's homeless population, despite making up less than 12 percent of the entire country's population. That is obviously in part because California has, well, at least Southern California has some of the best weather in the world. The weather that this Southern California coastline has only exists in seven percent of the world's land. That's it.

Okay, and it is the only place in the United States that has the weather system that we do, which is the Mediterranean Chaparral climate. basically nearly I'd say 80 to 90 percent of the time you're looking at 72 degrees year-round Uh, no clouds. It's insane. It's beautiful.

But what is LA County doing? Oh, LA County has about 69 000 homeless folks. and they're spending a record 609 million dollars on homelessness this year. That amounts to almost 10 000 being spent per homeless person. And guess what, when you drive around La What do you have? Homeless on the streets, homeless dying on the streets, homeless intense at the side of Highways All over the place, people getting accosted, people dying, the drug problem getting worse, the mental health issue getting worse.

Everything is a complete disaster and at the same time as homelessness is increasing in California like downtown, San Diego just hit a record for six months in a row of more homelessness. What are other states doing? Oh wow. States like Florida are actually managing to decrease their homeless population because imagine this, they're actually funding Emergency Shelters Supportive Housing Job training and mental health treatment. Holy smokes, what? I ran on two years ago.

Actually, it's almost slightly more than two years ago now, which is crazy already to think about. But uh, more than two years ago? That's what I ran on. That's insane. It's absolutely insane that California can't figure it out.

Uh, the richest state by GDP in the country and can't figure it out. Potentially the uh, let's see turkey and Germany just boosted up. So we're probably around the seventh largest economy in the world. sixth or seventh somewhere around there, depending on how you count.

India uh and Germany in there. But anyway, sad, really sad. that's my take. Had to get it out of the way.

I'm sorry. You know some people like Kevin that that sounds too aggressive. You know what? What we're doing now is aggressively stupid and I don't know if it's because you got a Democrat problem I I or it's because you've got a republican counter problem I Don't think that's the problem because let me make it very simple: California happens to be a super majority of Democrats Now I'm not trying to offend people who are Democrats I'm just saying California happens to have all the power literally in one party. This is a one-party State And and I'm not I'm not saying that California is like Joe Biden has the presidency and the house and the Senate.

It's a little different in our legislature. so we have the governor who's a Democrat. We've got the assembly. Uh and uh.

we've got the house in California and guess what, when you put it all or the Senate California when you put it all to assembly. Sort of like the house version, you've got the assembly, the Senate and the governorship. All of them. Democrats And guess what? They have not a 50 50 majority.

They have a super majority in every chamber. so Governor's obviously Democrat each. Congressional house, well, legislative house we call it here. Uh, super majority of Dems.

In other words, if uh, if there was any even potential of a republican governor coming in, the legislature could just veto anything, the Republican Governor does anything because they have a super majority of control And some people like oh, but Kevin You know, back in the day, Arnold Schwarzenegger he was a republican. Yeah, didn't have a super majority of Democrats in the legislature then yeah. crazy crazy. That's all.

I Gotta say all I gotta say and it drives me nuts. All right next. So let's see here. ha ha.

The Armando You're making too much sense. Thanks. Uh, I am definitely not going to run for something in 2024. definitely not I am going to run house hack oh man.

uh I Don't know that people just don't care I Think you don't have leadership with balls in California I Think it's simple. Uh, of course nothing. Actually, in practice is simple. Everything takes hard work, but you need people willing to do that.

And if you don't have people willing to try, then you may as well just roll over and die. It's stupid. All right. What is next? Next up we gotta talk about Tesla All right, stand by.

we'll talk about Tesla in just a moment. Let's check in on Bloomberg for just a moment. How do these guys respond when we disinvert someday We're not gonna have curve inversion and I wonder what the world's gonna look like I'm fascinated also Tom just the the process of price Discovery in private markets over the next year and so a lot of people saying if you don't discover the price, maybe it didn't happen. Just like that.

that's very philosophical about it. I've heard that before. Nice. Lisa That's nice grandma.

Oh yeah, that's you know sometimes I click over to Bloomberg and they're just talking the biggest nonsense ever. I Think they just get bored in the mornings and they have no idea what to talk about. It's ridiculous. Ah Bloomberg I don't know I I Who knows.

All right we need to talk about. Tesla Tesla Tesla Tesla Wow. Tesla Blew it out of the park with manufactured vehicles in China 66, 000, 51 manufactured vehicles in China of 18.4 percent from December Byd still beat Tesla though shipping 150 164 vehicles. But remember, Byd ships a vehicle that is about a half as expensive and only about half of their vehicles are actually fully electric.

Uh, you've got a lot of hybrids in there and still a lot of traditional ice. Vehicles The overall passenger uh vehicle Market in China is sitting at about 1.24 million cars. Uh, produced production is expected to ramp back up in China as about 80 according to the economist of Chinese have been exposed to or have caught Covid and folks are expecting to be well back to work. Uh, the current targets for production in Uh at Giga Shanghai at Tesla are somewhere around 20 000 units a week star starting in late February or March Lee Otto Xping, Motors and Neo all had monthly and year-over-year declines uh in in sales uh and I That might be because Tesla's price cuts are putting substantially heavy pressure on other manufacturers which are not profitable or are barely profitable now.

I got a lot of heat when I started talking about this on tick tock on Tick Tock I Made a video talking about how Rivian from a gross profit point of view takes or it costs Rivian 271 bucks to generate a hundred bucks of Revenue. That's disgusting. From a gross profit point of view, that basically means you've got about 1500 bucks being spent to make somewhere around like 580 bucks. Rough math.

Okay, it's insane how much money they spent just on a gross profit point of view. Don't even look at net income because you know Rivian's losing money like crazy. Tesla On the other hand, uh, right now, when they bring in 100 bucks of revenues, looking at somewhere around twenty dollars, uh, of uh, 20 to 25 of gross margin, and maybe around 15 to 17 of net. Uh, and that depends on how conservative you want to be on the estimates, right? Technically, in the last quarter, we were closer to a gross margin of 25, but we've gotten some heads up warnings that we expect that to compress a little bit.

But the point is, Tesla is wildly profitable, while other companies are not Byd bringing down about a buck 40 to the bottom line and their earnings relative to Tesla. As we've said, somewhere around 17 to 20 bucks. It's insane now. I got in a little bit of heat on Tick Tock for Rivian because people are like oh well.

when Rivien was small and just doing 7 000 vehicles, or when Tesla was small just doing seven thousand Vehicles they were losing money too. And then what I did is I Went back to the 2014 numbers which roughly aligned Tesla Sold and manufactured around 7 300 vehicles and Rivien did about seven thousand. Six hundred, Seven thousand. Seven hundred in the last quarter.

So when you align that, you're like, okay, they're roughly a similar manufacturing stage. Well, we already know that Rivian's gross from profit margin is an abject failure. You're looking again at spending 271 bucks per 100 of Revenue gross I'm not talking Opex here I'm not talking about advertising or SG You know SG uh, selling in general, administrative expenses or research and development. I'm not talking about your Opex I'm talking about gross profit, abject failure, gross profit.

Well, if you look at Tesla back in 2014 when they were manufacturing just as many vehicles as Rivian was, guess what their gross profit was then remember Rivian right now. Negative: 271 per 100 bucks Tesla per 100 bucks. Still bringing 20 bucks to the bottom line in 2014. So I made a follow-up to talk talking about that and guess what the morons in the comments said? Then oh sure, pick the quarter where that makes sense and I'm like you I picked the quarter where the production aligned relative to the most recent quarter.

For Rivian, it's like some of these people have their heads so far up their own behinds. I Think they're just blind bag holders who don't understand the basic premises of fundamental analysis. People don't get it. I Look, if you are an investor, you should.

So Crystal Clearly be able to divide fundamentals from technicals. and if you don't understand the differences, you should probably not be investing in stocks. Start with something easy like real estate. even though the irony is probably at least half of you don't actually own real estate.

But that's okay because I think when you watch my channel, eventually you're going to get convinced to buy real estate. Not for me, it's not like I'm trying to earn a commission off you, but because I think that's actually going to help you substantially catapult your wealth unless of course you already have a net worth of over a million bucks. So with that said, I think smart people realize that why did Tesla have this horrible price? Uh, correction. last year, nothing to do with fundamentals or maybe nominally biggest thing was was the easiest Trend ever to short because Elon was selling like crazy thanks to Twitter and there was no end in sight in terms of how many Tesla shares Elon was going to dump just to fund Twitter So the easiest short hour? The technical.

From the technical point of view. once you start the short: Trend Guess what happens the Algos and the institutional hedge funds managing those Algos They come out. not even just the hedge funds, all the institutions they come on and go easy short. Oh okay.

going into recession? What should we do? Oh okay, yo, let's go buy. uh Costco and McDonald's which are you know, like McDonald's is an abject joke as well to be investing in, but it's performed a lot better year over year than Tesla. Why? Because oh yo technicals say let's go in a recession from growth to Staples and then eventually we'll go. It's very simple.

Okay, it's so that way when they answer the phone to their complaining customers about us going into a recession, the pension fund managers, the hedge fund managers, the institutions, the banks, the Morgan Stanleys whatever able to go. Ah, don't worry, we're going to do a recession. We have moved from growth to Staples because obviously you still have to buy toothpaste in a recession, right? Oh yeah, that makes sense. It's so dumb.

it is so dumb in the short term. The kind of technical movements that you get in the stock market. The good news is, in the long term, the fundamentals tend to shine through much. Kind of like we just heard two.

Nearly two years later after the April of 2021 fatal crash in Texas where two dudes launched a Model S on a small roadway, hit a turn. Took the turn too fast, car drives into a tree, bursts into flames. What happens after it bursts into flames? The dude in the front climbs to the back because the car catches fire in the front. Who knows what happened, if he was injured or whatever couldn't get out.

Both of them died, which is terrible. Turns out the guy was drunk while he was driving and I don't mean like you had a beer like eight hours ago. The guy tested twice the legal limit. That's that's deep.

Okay, that's really drunk I mean look, this is not to at all justify like no, nobody should ever drink after having alcohol, right? Uh, but let's just be real. I Would venture to say 80 of adult drivers who are not Mormons or who don't otherwise just not drink, have probably had a beer or a glass of wine at a dinner somewhere, and then have driven at some point thereafter. Okay, but this guy was. This was much more.

It's twice the legal limit you're talking about. Like probably six to nine shots of alcohol for a dude. Okay, to be twice the legal limit I mean you are plastered to be twice the legal limit. You probably couldn't even walk at all all if you wanted to.

Uh, okay, maybe even not that extreme. But but it's it's gonna. you're gonna have a hangover the next day. Let's put it this way.

anyway. So anyway, the guy's drunk drives into the tree you think bursts in the Flames they die. The big media story that comes out around it is Tesla crashes into train, bursts into flames. No one is in the driver's seat.

Must have been the guy showing off autopilot. And because the guy showed off autopilot and autopilot failed. Clearly these poor people died thanks to Elon Musk's Autopilot. That was literally the news story two years ago, you had scumbags like the LA Times say Where are The Regulators Why are cars allowed to drive themselves with nobody in the passenger seat which I just said a lot of things.

So let's unpackage that for a moment. I Had an hour and a half long interview with the editorial board of the Los Angeles times when I ran for governor and guess what? all it was was a 90-minute opportunity to find any opportunity to write a hit piece on me so they could prop Gavin Newsom up on the pedestal. There was a zero abject interest and actually understanding the perspectives that I was sharing. Scumbags don't like that.

it's rude and it's wrong. It's not what consumers and voters in California deserve, but that's the mainstream media for you. They got to keep stroking the guy in charge, so that way they get invited to his press conferences. It's ridiculous.

Okay, the LA Times allegation out of the way. Let's go back to what they wrote. So what did they wrote or what? What are the mainstream media right? Oh, where are The Regulators Where are The Regulators Tesla crashes into tree people dying in Flames Where are The Regulators Oh wait, what comes out now? Oh wow uh, no self-driving uh or any autopilot features were actually enabled. The car crashed without any automated or Adas support systems activated.

Finally, we find that out two years later, but that's after the story already broke. That's sad. But not only is that sad, you have no one. Well, with the exception of some folks on Twitter doing doing uh, you know, God's work so to speak.

Uh, you have nobody. Uh, no, no mainstream media admitting, uh, the disgustingness of their headlines suggesting that without any conclusion. Oh okay. well because the guy was found in the back, it must have been Autopilot.

Even though that's not how autopilot works like you have to, you have to somehow be able to engage the steering wheel to actually be able to function on autopilot. Mainstream media doesn't want to take the L for it because it's embarrassing. Anyway, here you go: NTSB Reports Uh. In a report released Wednesday showed evidence indicated that the driver of the Tesla Model S hadn't engaged any of the Adas features before crashing in.

Houston In April Of 2021, two cars occupants died. Initially, a local Constable said he believed the model S had operated without anyone in the driver's seat when he crashed into a tree. But that was also very quickly dispelled because the fire department realized, wait a minute, the steering wheel is damaged, implying the person wasn't wearing a seat belt. true with the seat belt.

Uh, but anyway. uh, they the damage on the steering wheel implied that when the impact happened, the person probably hit their head on the steering wheel, which is pretty crappy. Uh, but uh. But anyway, here's just another sort of, um, finally, after two years finally, uh, some relief and justification showing that Tesla once again was not at fault, but that that doesn't make for a good media story.

Uh, Anyway, now it's worth looking just briefly since we've gotten over some of the anger around Tesla and the mainstream media. It's worth looking a little bit at the fundamentals because yes, Tesla has officially broke 200 now. One of the things that is fascinating is myself and the team. Just a few days ago when we were in the race for uh, you know to see if we could hit 200 before the expiration of the coupon code for the programs on building your wealth Uh, which? which? Um, uh, you know we just hit 200.

But anyway, we were talking about this belief that we have that once Tesla breaks 200. Uh, it would probably rip past 200 and in pre-market right now, it's sitting at 208. I Think today will be the test to see now that we have officially closed past 200 yesterday at 20129, Will we rip past 200? Uh, that is just a belief that we have as it's bounced basically straight up off of this Fibonacci curve. Uh, and so we'll keep an eye on it.

in the past Tesla used to have these like 27 to 30-ish day runs of uh, the stock market being open. What does that put us at? Now One two three four five, six, seven, eight, nine, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22. hey, based on uh, old school history, we should have at least another five days. which is interesting because you've got CPI coming up next week.

But anyway, let's look at some fundies for a moment. So going back to fundies: I haven't really changed anything here. I'm taking about a 10 take rate on FSD which is extremely low, but I'm doing that on purpose. Uh, on the 10 take rate on FSD for 15K because there is the monthly software as a service option where basically you can pay a monthly fee for FSD and so I'm lowering the cash that goes into Tesla basically right out of the gate for Uh 2025..

my 2025 projection is a million Vehicles fewer than what Kathy Wood is projecting, although she's got some pretty, uh, pretty ambitious targets. Let's just say there's no shade on Kathy Okay, I love Kathy I think she's a brilliant marketer? Uh, but but I think some of the numbers are too ambitious, but that's okay. Maybe I'm just being a little bit more conservative and that's okay. Everybody can have a different point of view Revenue per vehicle I'm at about 47 000.

I think she's right around 46 000 so we're pretty close on that. But anyway I put in about a 10 from FSD I Don't put in any revenue for Insurance semis Tesla Bot Auto taxis or or you know, self-driving taxis I don't put anything in for that I Do put in about 10 for services which mostly gets costed out because the margin is very low on Services although it's finally going positive uh and uh for for energy I just put in basically one percent of total sales uh represented by about energy which could end up being low if I go with like a terribly low margin of 80 which we should not be at a 20 gross profit margin in 2025. We should realistically be back at 25. so we'll change that number in a moment.

But if we leave it at 80 percent uh, you're looking at a future price Target based on a PEG ratio of 1.67 at 30 percent assumed EPS growth. So if you think EPS is growing at 30 in 2025, 6, 7, 8 then then and then you assign a 1.6 Peg Very, very traditional, very normal. You should be at at least 400 bucks uh in 2025.. Now if I change this margin to Uh 75, so a 25 gross margin you can see that quickly jumps to 511.

Uh, so somewhere between 400 and 511 by 2025 seems very reasonable. Uh, One of the downsides though, is that the present value has been skyrocketing. That is the ironic downside of the price going up is that your rate of return now on Tesla from what I've been previously making these videos is has dropped almost in half. Uh, it's dropped almost in half because the price is so much higher Now Now, don't get me wrong, it's still a phenomenal number, even in in the, uh, worse, worse ER case scenario: I don't think that's a word.

Uh, But even if at the 399 price target for 2025, you're looking at uh, somewhere around a 24 compounded annual rate of return. Now, keep in mind, while I think what I'm talking about is financial and some people may see some of this as advice I Want to be very clear: I I'm not giving you personal advice okay I think I provide great advice on the channel, but I'm not providing personalized advice I am a fight and financial advisor. but that's a very important difference is I'm not providing anyone anyone I don't do it. personalized advice I don't look at what the heck is going on in your world and your portfolio and go.

You should rebalance this to this. Okay, that should be obvious. Okay, uh, but anyway, some people don't recognize that. that's obvious.

So anyway, uh, but I think this is this is still very very very good. This is where the worst case scenario number here: 24 year over year. Uh, but however, uh, Tesla's going to get to the point where where this is going to start looking less attractive, right? Let's say this gets to 350 this year, right? So say Tesla runs to 350 this year, All of a sudden, in your more worst case scenario, you're only looking at a four percent compounded annual rate of return. At that point, it makes sense to just dump everything and go all in on house hack for me, not personalized Financial Advice Just saying.

Now, if if I go with a a different margin and I go a little bit, let me go more ambitious here. Okay, let me go 30 to see opportunity cost fomo wise what you would then potentially miss out on go back to a 30 gross margin. potentially. Now you could be at a future value of 623 right? And so you're you're compounded anywhere in return would then be 21, so my expectation would have to be greater than that for investing in something else which I think could be reasonable.

Uh, especially since that is that is probably a little bit more hopium. Maybe you're closer to that 25 level. It's about a 13 annual compounded rate of return for about three years. So anyway, depending on how you play the numbers uh, should in my opinion, guide your your investing thesis and your plans for the for the company and for your Investments Obviously I think that fundamentals are the most important thing when it comes to investing.

Uh and uh, let me give you another a brief brief example. Okay, when it comes to growth rates because this is very important. Uh, some folks asked me yesterday. they're like heaven.

You know. Enface had these great numbers, why did it sell down and I I Think people? don't? you know objectively. really. look at the fundamentals.

I think generally people on the internet, uh, look at the headlines and then when they look at the headlines, they what make a conclusion based on those and don't actually pull up the financials. So I was asking and this is this is valuable for Tesla as well. Okay, so I was asked yesterday. hey, what's going on with End Face So I tweeted this, uh, you can just follow me totally for free at Realme Kevin Over here, right? Why is End Face plummeting after great earnings with a quadruple beat? Top Line Bottom Line: Margin and guidance: That's quad beat.

Okay, simple. well. I Wrote: after hours trading is often low liquidity and undereducated training. Headline reading: not fundamentals.

That's because after hours end phase was up like 10 percent. But what did End Face close at yesterday? Well, end face closed like down four percent yesterday. So why is After Hours so different from when the market is actually open? Oh wow, surprise surprise, because you actually have people with, you know Big Boy Money. uh, making decisions based often on fundamentals, but not always.

Uh, could be based on technicals, right? But anyway, here are the problems with the fundies. Show you have a company whose growth rate used to be 30 a quarter 20 a quarter, fourteen percent a quarter, and you ended with 724 million dollars of Revenue in the fourth quarter of Uh 2022.. the projected revenue is expected to be 720 for the first quarter. That's the midpoint, could be higher, could be a little lower.

Well, that represents a negative growth rate quarter over quarter. And we understand there's a massive seasonal difference between going from Q4 to Q1, but especially in the Solar world. But at the same time, your costs are going up by somewhere around 1500 basis points and you're expecting a lower gross profit. So all of a sudden you have a company that's growing like crazy, not growing like crazy anymore.

And this is where if you go back to the Tesla Fundies and you look over here and you go well. if the growth rate, it falls from 30 on earnings per share. and let's say that growth rate just uh I don't know. Let's say it goes down to 10.

Okay, well 10 times 1.67 means you should only be trading for about a 16.7 times P E ratio, Which that brings your your price that you're you're able to pay for the company to 170 bucks. which means you should sell it today, right? But nobody actually believes that Tesla's only going to grow at 10 on an earnings per share basis for the rest of the decade. That'd be crazy if you believe that. Do Not invest in Tesla right? So that that's the point of having some form of stable PEG ratio 1.67 which then you adjust based on EPS to find out what kind of multiple you should be using for the company.

You know the reason you have companies like Ford uh and GM selling for these incredibly low multiples is because their growth is like nothing or negative or because the CEO of Ford is a complete idiot. Well, maybe I shouldn't say he's a complete idiot. Well, let's just put it this way: I tweeted the other day and again another reason you should follow me at realme Kevin on Twitter doesn't cost you anything. Follow me over there.

Uh, but I tweeted the other day this, uh, this clip of a Ford CEO Jim Farley on the earnings call and I was so blown away because he's bragging about how they're going to make lots of money going forward. That's that's what he was bragging about. How are we going to make lots of money going forward? Uh, in uh in basically uh, automotive and he's asked by an analyst. hey, do you think you could get to a 20 gross margin which is Tesla's worst case scenario by the way, right? In other words, an analyst is going to forward and going yo? Do you think you could make it to Tesla's worst case scenario? And the CEO has the following to say about getting to the worst case scenario.

Basically, he starts off by saying well, no, Basically, not on the car because we're still figuring out the manufacturing process. Even though we've been manufacturing for over 100 years, we can't figure out how to make an electric vehicle profitable. and we probably won't be profitable on electric vehicles until 2026. But here is where we can make real money.

Okay, this was just embarrassing, even the way he said it. Okay, ready for this. Listen to this. Not our batteries, not the EV platforms, but our new, fully updatable electric architecture.

Because what we've learned on Pro is we can make real money on software. No, did you hear that we can make real money on software I mean first of all, it sounds extremely creepy the way he said it. Uh, but but it's because they're sucking. It's insane and sure.

Mr Steve Look, you know what? I appreciate you Mr Steve Mr Steve Here says and look, look, we love Steve he's a course member Steve and I we're gonna have great beer together one day. Uh, when my plane is back to Flying because it's going under a war, it's under a warranty upgrade right now. we're gonna do great stuff. Uh, Steve Here says GM is securing the battery supplies needed Tesla's liking that.

That's fantastic and so is Ford Ford is also securing the supplies that they need to be able to make the vehicles that they need for the year. Ford Said exactly the same thing that does not make them profitable though on EVS GM won't segment out their EVs and their EV profitability because they're not profitable so you can secure the supply chains all you want. uh I'd rather I'd support your argument in saying that EV Supply chains are probably going to have more of an issue, right? But uh, that doesn't mean you're actually going to be profitable. And this idea that Ford's manufacturing quality is better than Tesla I mean this is like an age-old argument.

Uh, Tesla has panel gaps and stuff like that. Let's talk about Ford's manufacturing though. But you know what? Rather than me make an argument, uh, about Ford's manufacturing potential and quality or whatever. let's just look at what Ford CEO said about their quality here.

Okay, uh, so uh, let's see here. Okay here we go. The real future profitability on Uh EVS is basically what they call second Cycle Products This basically means we suck at manufacturing EVs and once we figure out what we're doing wrong, then we'll be able to finally be profitable. Maybe keep in mind and you can just Google This nobody expects Ford to be profitable at EVS until 2026..

that's three years from now. Potentially three and a half years from now if you look at the end of the year or be like 3.75 But anyway, we didn't know when we designed our first electric vehicles that we had basically wiring for our cars. that was one mile or 1.6 kilometers longer than it needed to be. We didn't know that it's 75 pounds heavier than it needed to be.

We didn't know that we under invested in braking technology. Oh, that sounds fantastic. So look I get it. Manufacturing is an iterative process, but you're taking an old dog and you're trying to teach them new tricks.

Uh, look, don't get me wrong, some of the old school Fords were great. Uh, uh, I Should I wish I could find that anecdote? Maybe I could find it really quick. There was an anecdote yesterday and I realized it's an anecdote. So it's not.

uh, it's you know. Certainly not. something that we could say is is a is a fact right now. But let's look at four recalls.

There was this dealer who yesterday on Twitter was, uh, complaining about Ford's quality and again I realize this is an anecdote. Okay, I hate it when people do that in politics and they don't flag that. It's an anecdote where they're like, oh well, this is how it is because so and So says so. It's like, well, it's an anecdote.

Okay, it's an Anika but it's just something to pay attention to. So uh, a car dealership guy. Great guy. You should follow him.

uh oh I don't know why I'm not following him. There we go I followed him. but anyway. Card dealership guy.

great guy. uh hey, he follows me. Uh, anyway. so uh, he here he writes Ford Dealer unhappy with Ford in 2012 Ford had 1.1 million recalls in 2022 Ford had 9.8 million recalls Ford should only have one goal to build the best quality car in the world.

Word of mouth would sell it, not rebates and not advertising in my entire career. The quality can't be any worse and we are told it is now being addressed. Why wasn't it addressed 10 years ago and he talks about the stat We just talked about blah blah I don't know I don't know Again, like you know I don't want to come across as cherry picking I don't think the car dealership guy is like abjectly like, you know, only for Tesla You write some pretty neat things as well about uh about like carvana. He pays a lot of attention to what's going on with Carvana.

Uh, car auctions and session. We'll talk about this a little bit more later. Uh so I I think he's worth a follow-up Um, yeah, you know I'm trying to I'm trying to get him to do an interview so we could get a face reveal but but he thinks that uh, face reveal would end up hurting his ability to have people actually want to follow him. Um so I I I don't know I Love the self-deprecating humor but uh, uh, you know.

Anyway, so that is my thesis. My thesis on uh Tesla no Steve I'm sorry I'm sorry okay Steve's like haha I just got wrecked. No, no I'm sorry Steve Okay, okay, like again, it's an anecdote. Maybe that's not actually what's happening I don't know, right? It's just something we want to pay attention to.

Uh and and I guess the way I look at it is the frustration that I see by the CEO in the earnings call kind of reiterates a little bit of some of the issues that they have here, right? Uh, and and this this uh, this idea that uh, you know they won't. They don't even expect themselves to be profitable I think in the long term, that's more important I Think ultimately, companies will probably get to the bottom of their quality issues, but who knows, maybe not Anyway, Uh, that's my take on Tesla Let's go ahead and listen to Bloomberg for a moment see what's going on over here I sanctioned of Oliver Wyman Three N's T-a-n-n Wow, there we go. I Mean it's worth asking. you'll never find me.

Okay, these guys are boring. come on man. like say something over at CNBC that seems like the same thing they're They're not exactly the same Q-sip because they're they're common, shares different classes. So we we brought this to Goldman Sachs and said hey, we're seeing hundreds of these type of Trades because it's not just shell There was other companies that have two different classes and they said basically, whoops, uh, we didn't mean to be doing that I mean this goes back 10 years.

Um, and so what they've told us is that they're they're notifying clients. They're unwinding. These trades are not going to do this anymore. Uh Steve Baumer Said he's going to mend his taxes.

Here's the more. Oh, that's fascinating. How the secret? How the wealthy sidestep the wash sale ban? They just have different classes of shares. Oh, that's brilliant.

Oh my god. Um, too late. Now cat's out of the bag. Uh anyway.

uh okay. so I think it's worth doing a little uh bit of talking and talking about? uh The Fad that we've got some talk to do about consumers CPI Preview: Oh good lord, we also have to talk about the oh boy we've got. Oh man, oh man, we got a lot to cover. It's gonna be good.

We can talk about uh Nordstrom I I Tweeted about Nordstrom yesterday and people got mad at me. Now people are happy because of something that happened yesterday. But anyway, uh, let's uh, let's briefly understand a little bit. uh, about what's going on.

Uh, with at least the latest in terms of Fed speak. uh. and I'm also going to pull up the latest conditions. Actually, we could just go pop on over here.

so uh oh. listening again. Okay, interesting. all right.

let's go let's talk about the Federal Reserve and what's going on with financial conditions? The reason we want to talk about financial conditions? is a very, very clearly important because Jerome Powell In his discussion with Uh Dave Rubin from the Washington DC Economics Club Astrone Powell Well, where drum Powell was asked hey, Jerome You know what do you think about this latest Jobs report and immediately Jerome Powell responded and said ah, well Financial condition's already tightened now I Thought that was really incredible because you immediately had this response from Jerome Powell that suggested hey, look, you know we're just letting the market respond to the data right now and we're going to respond to the data as it comes in Now That actually gives me a lot of confidence. and Faith because it shows the market understands the challenge We Face We must get inflation down and when reports come in hot, guess what happens? Treasure yields rise. And that's exactly what happened. Although today they're softening a little bit.

now. right after the Fomc meeting, we were down at 3.38 Now we're sitting at about 3.59 Yesterday, we were in about the 3.6 range. We're still a good chunk, about 20 to 30 basis points higher than than where we were at the low just uh, just about a week or so ago. But it's worth taking a look at a sum of the analysis some of the reports that we're seeing.

So let's start with Goldman Goldman Here suggests the following: that macro data is trimming policy tails and this argues that maybe rates could go lower or rates could go higher. And basically they're suggesting here that they believe, uh, that ultimately monetary lags are going to be shorter that are commonly thought or traditionally thought. Now, that's actually a little bit bearish because it suggests that the FED May potentially not be able to put too much weight on this idea that monetary policy is going to lag and we could just kind of get to a certain point and wait longer. They might end up being a little bit more aggressive if they need to.

This is quite interesting because you know it's not the best and most bullish thing for markets to think. Okay, if the FED has to be more aggressive, then what do you end up with? Well, the following: the strengthening case for pricing a narrower path for the policy rate around the projected rate of five to five and a quarter percent, and this, in their opinion, translates to higher, longer maturity yields. Basically, in English, yields could be higher for longer. And yesterday we got a little bit of fed speak that ultimately gives us a path for how long could the Federal Reserve end up needing to keep policy restrictive, especially if the lags that we think monetary policy have are not going to be as drawn out as maybe they had been in the past.

In the past, we used to think that the Federal Reserve would raise rates and it would take about 18 months for those higher interest rates to actually trickle through the economy. Now, the Federal Reserve says that lag could be as little as three to six months. It's pretty incredible, but that does mean the Federal Reserve has to be hawkish for longer. And the question from Goldman Sachs is okay.

Well, uh, have have their recent discussions been hawkish? Well, according to Goldman, Even though it seemed like Dropout was dovish, the Goldman Sachs Economists note that implications for the FED path this year actually leaned a bit hawkish, particularly Powell's optimism on growth despite recent weakness and Survey data, and that his observation was very clear that doing too little was the most difficult risk to manage. Now that's important because it aligns with some information that we got yesterday about how long does the FED actually think they're going to keep rates high? Now this is very important. We have believed based on the Bond Market's expectations that we would end up seeing the Federal Reserve cut rates by the end of the year and if they cut rates by the end of the year even though they say they're not going to cut rates by the end of the year, even though the Bond Market's pricing that in it could happen if data continues to come in Weak. However, yesterday we had uh Mr Williams from the Federal Reserve unfortunately, deliver a little bit of a blow to us.

Uh, Mr Williams said that not only is it reasonable to get to 5.1 percent, but we're going to need to maintain quote. I'll just read you the quote. We're going to need to maintain quote that rate for a few years to make sure we get to two percent inflation. That's terrible.

That's very bad. It is exactly the opposite of what the market has been. Pricing in the Market's been pricing in that we're going to get to a peak. We'll stay there for a few months and cut down.

Now this is just one person at the Fed, and it doesn't necessarily mean that because one person at the FED thinks we need to maintain a rate of 5.1 percent for years that we are going to. But let's just say, when this press conference happened, people were not very happy in the market. And guess who is a Committee Member on the Fed this year? Oh, Mr Williams The person who thinks rates should stay at 5.1 for years that's not good. That's actually quite bad.

And this is potentially because even though on one hand, Jerome Powell is talking about how disinflation could be uh, at least inferred as being dovish by markets drum, Powell's making it clear that look, even though we're seeing disinflation i