Dave Lee on Investing

Dave Lee on Investing

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Dave Lee on Investing episodes

  • Have We Hit the Market Bottom? (Ep. 53)
    Please share this blog post: https://medium.com/@heydave7/an-alternative-plan-to-mitigate-the-spread-of-covid-19-and-get-americans-back-to-work-d1c18c052bf0
    “An Alternative Plan to Mitigate the Spread of COVID-19 and Get Americans Back to Work”
    Follow me on Twitter: https://twitter.com/heydave7
    Follow me on Instagram: https://www.instagram.com/heydave7
    Watch this video on how new tech goes mainstream, https://youtu.be/gVsFsydllNo
    Check out my archived articles/posts on Tesla and investing: https://teslamotorsclub.com/tmc/threads/articles-megaposts-by-davet.23473/#post-485768
    In this video I look at the question if we've hit the bottom, why I see signs of optimism, and challenges in timing the market bottom.
    The market is forward-looking and where the market heads depends a lot on future projections by investors. Where is this crisis headed? When will the peak be? How is the government responding? What are the risks of a severe multi-year recession?
    Currently, the U.S. is ramping testing and as a result we're seeing large number of daily new confirmed cases. However, testing is a lagging indicator so it's possible that we hit the true peak of new daily cases before it shows up as confirmed cases.
    Further, big money is looking at systemic risk and the major concern is how government action increases that system risk or decreases it.
    When the government takes action to decrease system risk (by mitigating spread and restarting economy), then it's more likely big money holders will turn optimistic. With optimism there's an increased appetite and appreciation for the future cash flow of companies.
    Also, media is often slanted, biased and influenced by big money. So it's not a reliable indicator to trust media and the messages in media as an objective assessment of what's going on.
    Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.
    Tags: Tesla, TSLA, Elon Musk, Model 3, Model Y, Cybertruck, Investing

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    12 min
  • How to Get Back To Work Fast and End the Shutdown (Ep. 52)
    Please share this blog post: https://medium.com/@heydave7/an-alternative-plan-to-mitigate-the-spread-of-covid-19-and-get-americans-back-to-work-d1c18c052bf0
    “An Alternative Plan to Mitigate the Spread of COVID-19 and Get Americans Back to Work”
    Follow me on Twitter: https://twitter.com/heydave7
    Follow me on Instagram: https://www.instagram.com/heydave7
    Watch this video on how new tech goes mainstream, https://youtu.be/gVsFsydllNo
    Check out my archived articles/posts on Tesla and investing: https://teslamotorsclub.com/tmc/threads/articles-megaposts-by-davet.23473/#post-485768
    In a matter of a few weeks the world has been turned upside down. The economy is shutting down. The stock market is plummeting.
    And millions of people are losing their livelihoods.
    In this video, I’m talk about the following:
    1. Latest data on cases in the U.S. and worldwide.
    2. Some reasons to be hopeful
    3. How we can get our economy started again
    The confirmed cases in the U.S. have skyrocketed. On March 10, there were about 1000 confirmed cases. On March 16, there were 4,663 confirmed cases
    As of this morning March 23, there were over 40,000 confirmed cases.
    Worldwide, the top countries with confirmed cases are China, Italy, USA, Spain, Germany
    Probably the most positive trend is that testing is ramping fast in the U.S., and this is a big deal.
    According the COVIDTracking.com, U.S. had about 10k tests completed as of March 12, 2020. And as of yesterday just 10 days later, the U.S. has tested about 228k people
    With increased testing, we are finally seeing how far this virus is spread. And people who have tested positive now can be empowered to self-quarantine and stop transmission. Without testing, people don’t know if they have the virus or not and it’s tough to self-quarantine if you don’t know you’re contagious.
    So, when testing becomes widespread it uncovers this hidden virus and in a sense shifts the balance of power to the humans, where infected people can quickly take the appropriate action.
    Now that we have testing ramping, I think we’ll get the situation under control. It’s a matter of time. And it’s also a matter of our containment approach.
    The big concern to me is how much the government is going to mess things up more or not.
    Data in every country shows a similar trend, namely that this disproportionately impacts the older population.
    That’s why it makes sense to do a shelter-in-place order that targets the elderly and vulnerable. We can protect those who need protection the most while not punishing others who need to make a living to make ends meet.
    In order for the targeted shelter-in-place order of the elderly/vulnerable to be successful we need to pair it with a health protocol for those who provide services to the elderly/vulnerable. And in order to get people back to work, we need a health crisis work protocol.
    In my Medium blog post, I list a total of 10 ways we can mitigate the spread of the virus while helping people get back to work.
    Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.
    Tags: Tesla, TSLA, Elon Musk, Model 3, Model Y, Cybertruck, Investing

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    11 min
  • A Roadmap to Restart the Economy (Ep. 51)
    Please share this blog post: https://medium.com/@heydave7/an-alternative-plan-to-mitigate-the-spread-of-covid-19-and-get-americans-back-to-work-d1c18c052bf0
    “An Alternative Plan to Mitigate the Spread of COVID-19 and Get Americans Back to Work”
    Follow me on Twitter: https://twitter.com/heydave7
    Follow me on Instagram: https://www.instagram.com/heydave7
    Watch this video on how new tech goes mainstream, https://youtu.be/gVsFsydllNo
    Check out my archived articles/posts on Tesla and investing: https://teslamotorsclub.com/tmc/threads/articles-megaposts-by-davet.23473/#post-485768
    In a matter of a few weeks the world has been turned upside down. The economy is shutting down. The stock market is plummeting.
    And millions of people are losing their livelihoods.
    In this video, I’m talk about the following:
    1. Latest data on cases in the U.S. and worldwide.
    2. Some reasons to be hopeful
    3. How we can get our economy started again
    The confirmed cases in the U.S. have skyrocketed. On March 10, there were about 1000 confirmed cases. On March 16, there were 4,663 confirmed cases
    As of this morning March 23, there were over 40,000 confirmed cases.
    Worldwide, the top countries with confirmed cases are China, Italy, USA, Spain, Germany
    Probably the most positive trend is that testing is ramping fast in the U.S., and this is a big deal.
    According the COVIDTracking.com, U.S. had about 10k tests completed as of March 12, 2020. And as of yesterday just 10 days later, the U.S. has tested about 228k people
    With increased testing, we are finally seeing how far this virus is spread. And people who have tested positive now can be empowered to self-quarantine and stop transmission. Without testing, people don’t know if they have the virus or not and it’s tough to self-quarantine if you don’t know you’re contagious.
    So, when testing becomes widespread it uncovers this hidden virus and in a sense shifts the balance of power to the humans, where infected people can quickly take the appropriate action.
    Now that we have testing ramping, I think we’ll get the situation under control. It’s a matter of time. And it’s also a matter of our containment approach.
    The big concern to me is how much the government is going to mess things up more or not.
    Data in every country shows a similar trend, namely that this disproportionately impacts the older population.
    That’s why it makes sense to do a shelter-in-place order that targets the elderly and vulnerable. We can protect those who need protection the most while not punishing others who need to make a living to make ends meet.
    In order for the targeted shelter-in-place order of the elderly/vulnerable to be successful we need to pair it with a health protocol for those who provide services to the elderly/vulnerable. And in order to get people back to work, we need a health crisis work protocol.
    In my Medium blog post, I list a total of 10 ways we can mitigate the spread of the virus while helping people get back to work.
    Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.
    Tags: Tesla, TSLA, Elon Musk, Model 3, Model Y, Cybertruck, Investing

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    11 min
  • We Need an Alternative Coronavirus Plan (Ep. 51)
    Follow me on Twitter: https://twitter.com/heydave7
    Follow me on Instagram: https://www.instagram.com/heydave7
    Watch this video on how new tech goes mainstream, https://youtu.be/gVsFsydllNo
    Check out my archived articles/posts on Tesla and investing: https://teslamotorsclub.com/tmc/threads/articles-megaposts-by-davet.23473/#post-485768
    Extreme "shelter-in-place" orders have been rolled out throughout the country to mitigate the spread of COVID-19. However, these orders are not sustainable as evidenced by the grievous economic devastation experienced by millions of people.
    Going forward we must adapt our plans to be more comprehensive and sustainable in an effort to mitigate the spread of the virus while not causing massive economic despair.
    I present a 10-part alternative plan that I urge policy makers to consider in place of blanket "shelter-in-place" orders that ban all non-essential businesss activity. By following this plan, the goal is to protect the vulnerable, mitigate COVID-19 spread, and safeguard our economy from further calamity.
    1. Shelter-in-place of elderly/vulnerable
    COVID-19 is a virus that disproportionately affects the elderly and immunocompromised. The mortality rate for the elderly is significantly higher than those younger. Thus, I think it's important to isolate the core problem we're trying to solve, namely that is to protect the elderly and immunocompromised while not devastating the economy and the lives of millions already economically vulnerable.
    This targeted shelter-in-place order would require the elderly and immunocompromised to shelter in home during this crisis.
    2. Certified safe provider protocol for those servicing elderly/vulnerable
    In order for the targeted shelter-in-place order of the elderly/vulnerable to be successful we need to pair it with a health protocol for those who provide services to the elderly/vulnerable.
    Counties should require those delivering groceries to the elderly/vulnerable be recently tested for COVID-19, wear masks/gloves, and to sanitize all items being delivered.
    Nursing homes should require every person entering the facility to have a recently cleared COVID-19 test, wear mask/glove, have temperature checked upon entry, and follow hygiene protocols.
    By providing a certified safe provider protocol we can ensure the elderly/vulnerable get the services they need in a safe manner.
    3. Workplace health crisis protocol
    Many countries in Asia are able to continue allowing companies to operate because they are implementing health crisis protocols in the workplace. Our country should follow.
    Employees should be required to wear masks at the workplace, have the temperatures checked upon entry, observe social distancing, and have amply hygiene/sanitation supplies available. Further, any employee that shows any possible symptoms of COVID-19 infection should be promptly tested.
    4. Transportation health crisis protocol
    We need to prevent the spread of the virus via our transportation hubs. These measures should be temporary measures exercised only during this time of pandemic crisis.
    At airports, we need a health protocol to check the temperature of each passenger before the board the plane and after the leave the plane. We should require the wearing of masks on the plane. Further, any person attempting to fly yet showing a fever or symptoms should take a rapid turnaround (ie., 4 hour) COVID-19 test.
    In taxis and ridesharing vehicles we ought to require the use of masks and a plastic barrier between the front and rear seats.
    While these measures might be inconvenient, they are a fraction of the current costs of economic shutdown.
    5. Gathering health crisis protocol
    We ought to limit the size of gatherings. And for small gatherings (ie., 10–20 people) we should require certain health crisis protocols, such as social distancing and masks.
    As we're able to make progress containing the virus spread we can gradually increase the size of gatherings allowed.
    6. Free testing for everyone who wants it
    While the U.S. is finally ramping testing, we need more ambitious goals. We ought to provide free testing for everyone who wants it.
    7. Mask procurement
    8. Open source treatment data
    9. Patient choice of treatment
    10. Vaccine fast-tracking
    Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.

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    17 min
  • [Rant] Tesla Factory Shut Down by Health Officials and Government (Ep. 50)
    Follow me on Twitter: https://twitter.com/heydave7
    Follow me on Instagram: https://www.instagram.com/heydave7
    Watch this video on how new tech goes mainstream, https://youtu.be/gVsFsydllNo
    Check out my archived articles/posts on Tesla and investing: https://teslamotorsclub.com/tmc/threads/articles-megaposts-by-davet.23473/#post-485768
    Health officials and the government have forced Tesla to shut down their Fremont and New York factories.
    Tesla will be suspending production at these factories from March 24 to April 7.
    However, it’s possible that local authorities might extend their “shelter-in-place” orders for longer and it could take longer for Tesla to resume production.
    There’s massive economic cost to these moves by the government.
    However, it’s these same health officials who failed us by not securing early coronavirus testing in January and February.
    And it’s the same health officials who pass these extreme business bans without fully considering who’s going to pay for the massive economic destruction that results.
    Hundreds and thousands of businesses are suffering, employees not getting paid, and many losing their jobs.
    The whole fabric of our society is being shaken.
    We need a comprehensive, smart plan that looks and learns from other countries (ie., like those in Asia) who have been more successful than us in mitigating the spread of the coronavirus virus in their societies.
    We need to consider targeted shelter-in-place orders for the elderly and vulnerable while providing them with services from certified safe provides.
    And we need to implement health protocols for business so they can continue to operate while mitigating the spread of the virus. Businesses ought to test employees, check temperatures daily upon entry, require use of masks, practice social distancing and have ample sanitary equipment on hand.
    We can’t just react to emotionalism or to surface-level analysis. We need to look to the core of the problem and find a comprehensive, smart, and wise solution.
    Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.
    Tags: Tesla, TSLA, Elon Musk, Model 3, Model Y, Cybertruck, Investing

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    13 min
  • Risks of Economic Depression: What You Need To Know (Ep. 49)
    Follow me on Twitter: https://twitter.com/heydave7
    Follow me on Instagram: https://www.instagram.com/heydave7
    Watch this video on how new tech goes mainstream, https://youtu.be/gVsFsydllNo
    Check out my archived articles/posts on Tesla and investing: https://teslamotorsclub.com/tmc/threads/articles-megaposts-by-davet.23473/#post-485768
    The U.S. now has over 11,000 confirmed cases of the novel coronavirus. And numbers are increasing rapidly as testing is ramping.
    Increased testing means it’s more difficult for the virus to hide and with more data it becomes easier to stop the spread.
    At-home testing debuting soon:
    https://twitter.com/JuliaTCheek/status/1240460076516872193
    https://time.com/5805953/home-covid-19-test-everlywell/
    As cases in U.S. skyrocket the danger is for mob hysteria to pressure politicians/health officials to make rash moves that aren’t balanced with economic and social risks in mind.
    Nanjing case study:
    https://www.youtube.com/channel/UCwHUYtwH5E41O6MiYoC19ng
    Article on rising cases in Brazil:
    https://translate.google.com/translate?sl=auto&tl=en&u=https%3A%2F%2Fg1.globo.com%2Fbemestar%2Fcoronavirus%2Fnoticia%2F2020%2F03%2F18%2Fcasos-de-coronavirus-no-brasil-em-18-de-marco.ghtml
    Importance of quick vs delayed feedback loops
    Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.
    Tags: Tesla, TSLA, Elon Musk, Model 3, Model Y, Cybertruck, Investing

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    20 min
  • Impact of a Global Shutdown? (Ep. 48)
    Follow me on Twitter: https://twitter.com/heydave7
    Follow me on Instagram: https://www.instagram.com/heydave7
    Alameda County (where Tesla Fremont Factory is located) Shelter-in-Place Order on March 16, 2020, http://acphd.org/media/559658/health-officer-order-shelter-in-place-20200316.pdf
    Watch this video on what a 10x company is, https://www.youtube.com/watch?v=r9HtG-jJSTY
    Watch this video on how new tech goes mainstream, https://youtu.be/gVsFsydllNo
    Check out my archived articles/posts on Tesla and investing: https://teslamotorsclub.com/tmc/threads/articles-megaposts-by-davet.23473/#post-485768
    What we’re going through at the moment is truly historical. Countries around the world are shutting down large parts of their economy.
    I’m going to go over 5 things in this video:
    1. Review some stats on what’s going on.
    2. Highlight some of the things governments around the globe are doing.
    3. Look at how the market is reacting
    4. Risks to companies at large, but also to Tesla.
    5. Bigger picture
    Before I start, this is a snapshot of my views today. They are changing on a daily basis as we get more info. So, my views tomorrow and next week will be different. But I want to share how I’m processing things in hopes that we can look at things from different angles.
    Lastly, I share some risks regarding economy, companies and Tesla.
    Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.
    Tags: Tesla, TSLA, Elon Musk, Model 3, Model Y, Cybertruck, Investing

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    22 min
  • Coronavirus: How Concerned Should You Be?
    Coronavirus: How Concerned Should You Be?
    Follow me on Twitter: https://twitter.com/heydave7
    Follow me on Instagram: https://www.instagram.com/heydave7
    Watch this video on what a 10x company is, https://www.youtube.com/watch?v=r9HtG-jJSTY
    Watch this video on how new tech goes mainstream, https://youtu.be/gVsFsydllNo
    Check out my archived articles/posts on Tesla and investing: https://teslamotorsclub.com/tmc/threads/articles-megaposts-by-davet.23473/#post-485768
    In this video I share my current snapshot thoughts on the Coronavirus, where it’s headed, and what we can do.
    Here are the links I shared in this video:
    https://www.nba.com/article/2020/03/11/nba-suspends-season-virus-outbreak-ap
    https://twitter.com/tomhanks/status/1237909897020207104
    https://www.scmp.com/news/china/science/article/3074351/coronavirus-can-travel-twice-far-official-safe-distance-and-stay
    https://twitter.com/heydave7/status/1238163204666052608
    https://twitter.com/BBCLBicker/status/1237206433206173697
    https://www.bbc.com/news/world-asia-51836898
    https://abcnews.go.com/International/south-korea-takes-measures-face-masks-domestically-amid/story?id=69254114
    https://twitter.com/heydave7/status/1236414100839645184
    https://twitter.com/heydave7/status/1237112530993950720
    https://twitter.com/heydave7/status/1237462315416432640
    https://twitter.com/heydave7/status/1237466106320707584
    https://twitter.com/heydave7/status/1237467521864699906
    https://twitter.com/heydave7/status/1237473889082470400
    https://twitter.com/heydave7/status/1237605254738264065
    https://docs.google.com/spreadsheets/d/1aeWzsPG31fK87kEyJwms0PjcRCfvlSIhEsDmSrfQAp8/edit#gid=480336243
    https://www.cdc.gov/coronavirus/2019-ncov/testing-in-us.html
    Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.
    Tags: Tesla, TSLA, Elon Musk, Model 3, Model Y, Cybertruck, Investing

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    31 min
  • Elon Musk Secret #2: Don’t Optimize Something That Shouldn’t Exist (Ep. 46)
    Follow me on Twitter: https://twitter.com/heydave7
    Follow me on Instagram: https://www.instagram.com/heydave7
    Watch this video on what a 10x company is, https://www.youtube.com/watch?v=r9HtG-jJSTY
    Watch this video on how new tech goes mainstream, https://youtu.be/gVsFsydllNo
    Check out my archived articles/posts on Tesla and investing: https://teslamotorsclub.com/tmc/threads/articles-megaposts-by-davet.23473/#post-485768
    Have you ever wondered how Elon Musk comes up with new ideas?In this video, I’m going to take a deeper look at how Elon thinks about new product ideas.
    And by doing so, I think it’s going to make us better thinkers and innovators.
    This past week, Elon was interviewed at the Satellite 2020 conference.
    He was asked about what advice he would give to his younger self.
    Elon talks about the importance of having a simple design
    If too complex often wrong
    One great example of simplifying design is the Boring Company
    Original design was a car carrier on a track
    https://www.youtube.com/watch?v=u5V_VzRrSBI
    Then a Model S/X directly on a track with cushions in front
    https://www.youtube.com/watch?v=WQn-D-i5lyM
    Then a smooth road, rely on Autopilot
    https://www.youtube.com/watch?v=VcMedyfcpvQ
    Easy to get stuck on the solution but when solving a problem, the solution is variable.
    With the Model 3, Elon got caught up in a complex factory design. But they managed to pivot into a simpler design and this allowed them to build and ramp their China factory much quicker.
    Besides simplifying the design, Elon shared another very important principle:
    Don’t optimize something that shouldn’t exist.
    Don’t get stuck in status quo. Maybe it was ok for a different time.
    But things change rapidly - New technology, new software, new materials, new methods.
    Is there any significantly better way to do this?
    Examples of companies optimizing something that shouldn’t exist
    1. Blackberry - optimizing keyboard and handset
    Apple - didn’t focus too much on optimizing iPod, but on solving different problem… internet in your pocket
    2. Yellow pages
    3. Auto makers - more efficient ICE engines.
    Solar Roof is a great example of not optimizing something that shouldn’t exist.
    Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.
    Tags: Tesla, TSLA, Elon Musk, Model 3, Model Y, Cybertruck, Investing

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    21 min
  • Is a Recession Looming? (Ep. 45)
    Follow me on Twitter: https://twitter.com/heydave7
    Follow me on Instagram: https://www.instagram.com/heydave7
    Watch this video on what a 10x company is, https://www.youtube.com/watch?v=r9HtG-jJSTY
    Watch this video on how new tech goes mainstream, https://youtu.be/gVsFsydllNo
    Check out my archived articles/posts on Tesla and investing: https://teslamotorsclub.com/tmc/threads/articles-megaposts-by-davet.23473/#post-485768
    This morning the Dow dropped 2000 points.
    And trading was halted for 15 minutes at one point due to the circuit breaker rule which pauses trading when there’s a 7% drop in the market.
    There’s lot of questions going around.
    What’s going on? Where is this headed?
    There’s no overly simplistic answer to this question, since there are many factors and each of these factors are changing over time.
    The best thing to do in my opinion is to try to understand the major factors and what they mean.
    1. Infections are rising outside of China.
    And it looks like just a matter of time before the total number of cases outside of China will outnumber the cases inside China.
    Italy has enacted a partial lockdown of northern Italy where 14 million people reside.
    Cases in the U.S. are on the rise.
    And cases have been reported in over 100 countries.
    South Korea is showing some good signs as they are reporting a decreasing number of daily cases over the past several days.
    People are asking how will this affect the economy? And where is this headed?
    We know that it is spreading rather rapidly. The death rate might not be as high as being reported because most cases are mild and go undetected.
    As countries take action, events are cancelled. Travel decreases. People going out and spending might decrease as well.
    The economy can slow down, and the question is how much will it slow down and for how long.
    So, there’s a lot of uncertainty and unknowns at the moment.
    2. Oil price wars
    Saudi Arabia and Russia had an agreement for the past 4 years to control oil production, but that agreement recently ended. And they weren’t able to work out a new agreement.
    Russia refused to lower production, and Saudi Arabia just announced they are going to increase oil production.
    Increased oil production means lower oil prices. This means probably gas prices will go down.
    But it also means that a lot of smaller oil companies that are sensitive to oil price changes will likely go out of business.
    And since the energy sector is a big part of the U.S. economy, we will likely see a loss of jobs in that sector.
    3. Interest rates hit record lows
    The yield on the benchmark 10-year Treasury touched a record low of less than 0.4%, while the 30-year Treasury yield slid below 1%. These are both record lows. Investors are buying bonds offering super low yields, which means there’s a big appetite for safety. And this highlights investors’ concerns about a global slowdown. And maybe a move away from higher-risk assets.
    4. Recession
    The big question many people are asking is if all this will lead to a recession. A recession is a lagging indictor and usually means 2 quarter of negative GDP growth. So, you don’t really know if you’re in a recession until after 2 quarters show negative GDP growth.
    But here’s the essence of a slowing or even shrinking economy.
    Oftentimes, there’s a drop in confidence regarding the future.
    This leads to less spending.
    Which lowers the revenues of companies
    Which lowers their profits
    Which lowers their growth targets
    Which lowers the multiple investors are willing to give
    Which lowers stock prices
    Which lowers people’s retirement funds
    Which lowers confidence, and lowers spending.
    The cycle is often broken when people get confidence to spend.
    Stock get cheap and big smart money buys in
    Companies get more efficient
    Consumers start spending again.
    We still need to see how much Coronavirus will impact the overall economy and how much it will slow the economy. But in the short-term the Coronavirus impact does seem to be growing, and we’ll have to monitor what’s going on.
    5. Government intervention
    In the U.S., the economy is existential to the Trump administration. Meaning, a poor economy lessens his chances of re-election
    So I’d expect Trump to explore options for a government stimulus program. Governments around the world have motivation to try to mitigate the stock market damage and the economic damage being caused by Coronavirus.
    We’ll see what happens in the coming weeks.
    Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.
    Tags: Tesla, TSLA, Elon Musk, Model 3, Model Y, Cybertruck, Investing

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About Dave Lee on Investing

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Hi, I’m Dave Lee and welcome to my investing channel. I share my journey, lessons and thoughts on investing and personal finance to help people grow their resources and use those resources on what’s good and true.

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