Please Watch My New YouTube Video: NOW I’m Worried About Stocks.
Today’s video is NOW I’m Worried About Stocks. Investors and analysts have shown a willingness to pay for vapor in the last couple of days. The market reaction to two companies, Tesla (TSLA) and Apple (AAPL), has made this clear me.. Tesla’s earnings were terrible at $0.45 a share, below the expectations of $0.52 and revenue was down 50% year over year. However, the stock was up the day after earnings thanks to expert spin from CEO Elon Musk. He announced that Tesla will move ahead with the Robotaxis and full self-driving cars but it will also advance plans to produce a $25,000 car to enter the lower end of the market and compete with China. Although the company previously waffled on offering a more affordable Tesla, Musk was now suggesting it may be available at the end of 2024 or early 2025. When asked for more specifics, Musk declined to offer a definitive date on any of these promises. Wall Street ate it up and jumped on the spin that Tesla will be selling a more affordable vehicle “soon.” At this point, these are totally imaginary revenues from a car that has no release date and a full self-driving technology that doesn’t fully exist yet, and investors are saying they’re willing to pay for it? What worries me here is that in the market paying for spin has become normal because stocks go up on spin. Even if the product is “vapor,” investors are willing to get in on the stock bump associated with the announcement of imagined prospects. Similarly, Bank of America recently predicted Apple (APPL) is going to go up 36% soon because the company will announce its plans for adding AI into the iPhone. This is speculation on an announcement, not of the product itself, but on the prospect of an announcement. Bank of America is likely right on this, but I’m not willing to pay up for this speculative announcement without a tangible product or date and it concerns me that the market IS willing to do that. I understand the spins and the anticipation but the reaction and willingness to buy on vapors isn’t a sign of a healthy market.
