sundaymorning
Active Member
Lump, you and I have had our differences but I think your input can be valuable as long as you contribute by posting informative comprehensible information, as appose to the regular 2-3 sentences or punchlines... It is also critical when bulls are asking for you to expand your thoughts, that you follow up with an explanation. When reading each others' posts here, we sometimes misread the tone and take it the wrong way. I encourage you to change your mind...
Auzie, it is very difficult to time the market, sometimes you get it right and sometimes you get it wrong. Data oftentimes come in mixed, the only sure bet is to buy yourself enough time to ride the ups and downs. If you own options that are short term, I encourage you to wind them down, use the extra cash and buy further out in terms of leaps.
Not only is electric cheaper and more convenient, gasoline in California has not been that much cheaper than previous years. Despite the price of OIL dropping, gasoline for 91 OCTANE currently costs $3.70 in California, even though U.S crude only costs $48 per barrel. I hate to see what the price of gas would be like if OIL rises to 60-70$.
I have been putting much thought into the macro-economies lately and I must admit I am as puzzled as ever. The bearish and bullish signals are not as evident as one would assume. At first glance, the recent drop in TESLA stocks may be of concern, but if you look at the DOW, S&P, and Nasdaq, they are all at record highs (so there are plenty of buyers, additionally,Japan's Nekkei is also at record highs). I attribute these historical highs to the strong U.S economy, and of course, low interest rates.. the other factor that drives the stock market higher is real estate prices. Homes use to be cheap, so investors would flock to that arena for investments, but with current home prices also at all time highs, I don't see it as a feasible investment for the average speculator. Hence, they turn to other avenues, like stocks, gold, etc.
There has been some concern about Feds raising interest rates, which in turn may drive investors to the bond market. However, if Feds raise interest rates, it would indicate that the U.S economy is healthier than ever, which in turn would mean more buying power and higher value in the dollar, which then drives down gold prices. Where will gold investors put their money when gold prices are driven lower? There's the bond market, stock market, equities (a bit too risky IMO), real estate, savings or under the ole mattress, etc... Everyone of these markets will have its fair share of new investors driven by the higher dollar, lower gold value, lower oil/copper prices, etc. In the meantime, those flocking out of equities will soon be met with anxious buyer ready to buy low sell high... this in turn brings prices back to normal in due diligence. Let the current example of record Dows, S&P, NAZ be a clear reminder...
Now, if there is any indication of concern over FEDS, wouldn't the historical highs of the Dow, Naz, and S&P see some form of a contraction? Sure, however, we are seeing the exact opposite and those markets are expanding. Just how much longer? Who knows... the most common argument I've heard from bears is that the stock market has been on a tear, so it has to pull back. Just how many times have we pulled back during the past several years with the Russian Crisis, Fed Crisis, Europe Crisis, Greek Crisis, more Fed Crisis, Syria Crisis, Oil Crisis, Gold Crisis, Dollar Crisis and now FED crisis again? We've had our fair share of crisis each and every single year, reminding the market to pull itself back, only to break new highs. Why? Because we're making profits...
Not only are markets expanding, governments all over the world are easing rates (China, Japan, Europe, and as I type this South Korea, etc). Additionally, world markets are pumping hundreds of billions into Q/E, for example: Japan; while Europe has committed to one TRILLION $$$. More money = great for stocks. One other reason that supports low interest rates here in the U.S is because of Europe. If Europe remains unhealthy and in debt or weaker Euro, the U.S can't afford to raise it's interest rates because we are all exposed to Europe, our financial institutions has billions in credits tied to many European countries. Hence, if Europe is unhealthy, we need to lend a helping hand in keeping interest rates low. I do not see Europe as being healthy at this moment. If we raise interest rates soon, how will Europe repay its debt with its current Trillion $$ commitment to Q/E? Will more countries end up like Greece if we do? Hence, in order for us to raise rates, we must first see a steadier improvement in the U.S, and Europe must follow...with fears of exports being low I can't see the Feds screwing us (but hey, anything can happen) for this reason, I am predicting a delay.
On the flip side, if Europe's economy improves, then it would mean overall healthier macro-economies which justifies higher interest, just what we need for stocks to rise further.
China's GDP has recently declined, they are predicting 7% this year, down from about 7.5%, although this may seem as a negative, keep in mind that the U.S GDP is only about 2.5% so China's 7% is still pretty healthy, considering they are at a 300% growth rate compared to us. China recently reported export data, and it was a resounding beat btw. The U.S jobs market continues to be healthy, I do not see it turning 180% anytime soon. As I type this, the Nekkei has risen 240 points, Shanghai rises 44 points (1.35%) due to better than expected jobs report in Australia, which exports much of its materials to China...
Again, how does one interpret all these data? Should we pull our money and hang onto cash when the U.S continues to be healthy? Should we worry about Europe? There are too many factors and mixed signals, the picture is not clear enough to make an inform decision. Hence, we resort to our "gut" feeling, that maybe the continuous growth in the U.S economy will soon decline or will it not? How much longer can the U.S continue this amazing growth? In the meantime, the strong U.S engine is buying more time for the rest of the world to catch up. If the rising dollar is a concern for exports, it could also mean healthier imports, cheaper prices and more profits for other sectors of our economy. Higher imports, would then equate to more buying power going from the U.S towards other world economies, helping them on the road to recovery as they would need to produce more to meet U.S demand for cheaper goods. If the dollar falls in juxtaposition to the Euro, it would mean that Europe is recovering. We can also help Europe when we are traveling to their country and taking advantage of the favorable exchange rates, spending our dollars to help their local economies...
Oftentimes, when we get too clear of a picture of bad news or good news, it also means that it is too late because by then, everyone else will either be in or out.
So while all this is going on, Tesla continues to grow, the gigafactory continues to be built, Gen 3 gets a step closer to reality. Our storage solution and charging network footprint continues to increase.. where should my money be then? Bonds, equities, stocks, real estate, gold, oil, Europe, China? I don't see a better potential for a 5-10 bagger. Yes, I can lose a few points in the short term, but that's the price I will have to take. You gotta pay to play and if you are not playing, where will your money be?
Despite mixed signals from all over the place and my inability to dissect macro-economies. If there is an indication of a clear and precise picture it is the big pullback right here in our own back yard, yes I am talking about TESLA. Its pulled back pretty darn hard so far, and historically speaking, you should always buy low and sell high.... or you can play the wait and see game.
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