Dave Lee on Investing

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 (video was recorded on March 5, 2020) I’m going to share one of the most valuable skills an investor should have, and that’s the ability to do value a company using napkin math.

Learning how to value companies is at the core of being a great investor.

Investing in individual stocks can be very volatile and risk, especially since the fortunes of many growth companies are dependent on what their future looks like and how things turn out several years later.

One should be ablate write down on one page why you’re investing in a company, with both quantitative and qualitative reasons.

On my one-pager, I try to answer these key questions:

1. Why product is far superior and how they will defend that superiority

2. Is company addressing a large market

3. Does company have world-class execution and innovation

4. Is there a clear and probable path to 10x valuation in 5-10 years

In today’s video I use Tesla as an example of how to do napkin math valuation.

1. Revenue: units x average sales price (ASP)

2. Gross margin

3. Gross profit (revenue x gross margin)

4. Operating expenses

5. Operating profit (gross profit - operating expenses)

Napkin math valuation requires a lot of skills mixed together, and is a sort of science and art.

Further, there’s a lot of risk when evaluating companies so it’s important to do your own homework, make your own projections and take responsibility of your own investment decisions.

The numbers shared in this video serve only as an example of how I use use napkin math for valuation projections purposes, but these numbers and projections are only personal and shouldn’t be used to make your own investment decisions.

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

Subscribe to Dave Lee on Investing on Soundwise

Follow me on Twitter: https://twitter.com/heydave7

Follow me on Instagram: https://www.instagram.com/heydave7

Peloton Feb 2020 Investor Presentation: https://investor.onepeloton.com/static-files/2f2a47e2-1805-4ff4-9cb9-d2240a0399c6

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

So how do you value a company that doesn’t have any current profits? And how do you estimate what it’s going to be worth in 3, 4, 5 years? It’s got to be one of the most valuable skills you can have as an investor.

In this video, I’m going to show how I begin my research on a potential investment, and we’ll use Peloton as an example.

Larry He: Hi Dave, really enjoy watching your video. could you create a video to focus on how you valuate an unprofitable company? In the early days of Amazon, Tesla etc, they lost money year after year, how do you valuate them in 2, 3 and 5 years out, what valuation model do you use and what metric will you look into? could you share some books on this area? thanks for your time and looking forward to your next video.

Jan Jansen: Episode Idea: Although Tesla is an amazing example, I am also curious at how you look at companies that are at an earlier stage. Personally I have been looking at Peloton and I see a lot of similarities with an early Tesla. They offer the whole product and are disrupting an industry. Their product design, UX, NPS, CX and retention are great, and there's plenty of room for the network effect. Would love to hear your perspective on this, or any other company that's at a similar stage.

1. Get overview of business

2. Look for core advantage. Why is product superior and how will they defend it over time/

3. Find their business model. How are they making money?

4. Examine the numbers. Revenue (units sold x ASP), margins, expenses.

5. Make own valuation projections going forward with visibility.

6. Compare future market cap with current market cap

7. See if they have exceptional CEO

8. Look at what product owners are saying

9. Look at competition

10. Always go back to the key question

So what is Peleton’s superior product? How will they defend it? Can they keep up the growth? And the margins? Can they compete if Apple enters the market?

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

Subscribe to Dave Lee on Investing on Soundwise

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

Elon Musk was interviewed at the Air Force Association a few days ago, and he shared his ideas on how a company can excel at innovation.

It’s important to understand innovation and to be able to evaluate innovation. This can allow an edge in discovering the next big winners, companies that can 10x their valuation within 5-10 years.

In order to get outsized gains in investments, the company or companies you’re invested in need to surprise with how they’re able to enter new markets over time. The challenge is that new markets have entrenched players, brand recognition and often can be led by capable companies. In order to stand a chance, the new entrant needs to out-execute and out-innovate the existing market leaders.

Elon Musk shares a framework on how to ensure innovation in a company. Here’s his Incentive Structure to Incentivize Innovation”

1. Define roles where innovation is required

2. Promote those who innovate well.

3. Fire those [in innovation-required positions] who don’t try or have low ambition to innovate.

4. Have minor consequences for those [in innovation-required positions] who try significantly to innovate but fail.

All 4 points are crucial.

Reuters article on Starlink shakeup, https://www.reuters.com/article/us-spacex-starlink-insight/musk-shakes-up-spacex-in-race-to-make-satellite-launch-window-sources-idUSKCN1N50FC.

“SpaceX Chief Executive Officer Elon Musk flew to the Seattle area in June for meetings with engineers leading a satellite launch project crucial to his space company’s growth. Within hours of landing, Musk had fired at least seven people on the program’s senior management team at the Redmond, Washington, office, the culmination of disagreements over the pace at which the team was developing and testing its Starlink satellites, according to two SpaceX employees with direct knowledge of the situation. Known for pushing aggressive deadlines, Musk quickly brought in new managers from SpaceX headquarters in California to replace a number of the managers he fired. Their mandate: Launch SpaceX’s first batch of U.S.-made satellites by the middle of next year, the sources said.”

Menglu Wu

“Hi Dave, thank you for sharing. I am wondering how you think of Musk for working on so many different type of startup companies. I know he is brilliant and he seems to be able to succeed. But he is just not focused imho. Will this be a potential threat for Tesla?”

Elon is at the mercy of the people who he delegates large responsibilities to.

Elon is CEO of Tesla and SpaceX, while also overseeing Boring Company, Neuralink, and other personal projects.

Here’s how Elon Musk delegates responsibility:

1. Sets big goals

from first principles

achievable, tangible

2. Raises the capital

puts in own money

sets up company, raises funds

3. Hires the most capable people he can find

ie., Boring Company

Elon holds the management accountable. If they are not ambitiously innovating or at least trying like crazy, then he’ll fire management and replace. Without innovation, a new company in a competitive market doesn’t stand a chance.

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, Elon Musk, Model 3, Model Y, Cybertruck, Investing, China, TSLA Shorts

Subscribe to Dave Lee on Investing on Soundwise

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

Elon Musk was interviewed at the Air Force Association a few days ago, and he shared his ideas on how a company can excel at innovation.

It’s important to understand innovation and to be able to evaluate innovation. This can allow an edge in discovering the next big winners, companies that can 10x their valuation within 5-10 years.

In order to get outsized gains in investments, the company or companies you’re invested in need to surprise with how they’re able to enter new markets over time. The challenge is that new markets have entrenched players, brand recognition and often can be led by capable companies. In order to stand a chance, the new entrant needs to out-execute and out-innovate the existing market leaders.

Elon Musk shares a framework on how to ensure innovation in a company. Here’s his Incentive Structure to Incentivize Innovation”

1. Define roles where innovation is required

2. Promote those who innovate well.

3. Fire those [in innovation-required positions] who don’t try or have low ambition to innovate.

4. Have minor consequences for those [in innovation-required positions] who try significantly to innovate but fail.

All 4 points are crucial.

Reuters article on Starlink shakeup, https://www.reuters.com/article/us-spacex-starlink-insight/musk-shakes-up-spacex-in-race-to-make-satellite-launch-window-sources-idUSKCN1N50FC.

“SpaceX Chief Executive Officer Elon Musk flew to the Seattle area in June for meetings with engineers leading a satellite launch project crucial to his space company’s growth. Within hours of landing, Musk had fired at least seven people on the program’s senior management team at the Redmond, Washington, office, the culmination of disagreements over the pace at which the team was developing and testing its Starlink satellites, according to two SpaceX employees with direct knowledge of the situation. Known for pushing aggressive deadlines, Musk quickly brought in new managers from SpaceX headquarters in California to replace a number of the managers he fired. Their mandate: Launch SpaceX’s first batch of U.S.-made satellites by the middle of next year, the sources said.”

Menglu Wu

“Hi Dave, thank you for sharing. I am wondering how you think of Musk for working on so many different type of startup companies. I know he is brilliant and he seems to be able to succeed. But he is just not focused imho. Will this be a potential threat for Tesla?”

Elon is at the mercy of the people who he delegates large responsibilities to.

Elon is CEO of Tesla and SpaceX, while also overseeing Boring Company, Neuralink, and other personal projects.

Here’s how Elon Musk delegates responsibility:

1. Sets big goals

from first principles

achievable, tangible

2. Raises the capital

puts in own money

sets up company, raises funds

3. Hires the most capable people he can find

ie., Boring Company

Elon holds the management accountable. If they are not ambitiously innovating or at least trying like crazy, then he’ll fire management and replace. Without innovation, a new company in a competitive market doesn’t stand a chance.

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, Elon Musk, Model 3, Model Y, Cybertruck, Investing, China, TSLA Shorts

Subscribe to Dave Lee on Investing on Soundwise

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 video was recorded on the morning of March 2, 2020. The DOW ended up closing the day at 26,703, up 1293 points for the day.

Last week the market sold off due to Coronavirus fears, but today the market rebounded. Tesla Stock (TSLA) ended the day at $743.

When trying to predict what’s the market going to do with news like the Corona virus, often times it’s quite complex. Most of the time people tend to think in black or white, either/or. However, there are many possible scenarios with varying degrees of probabilities.

When betting on this kind of news, there are two main factors:

1. Coronavirus impact

2. How market reacts and when

You could be right on the Coronavirus, but could be wrong on how the market reacts and when.

Determining the how the market reacts and when can be very difficult doe to many factors, such as:

How much market goes down

When it goes down

When it starts going up

Quickly goes up or slowly?

Government actions?

Big money actions

It’s also difficult to predict where Coronavirus will end up in 2-3 month and it’s impact on the global economy.

To bet successfully you need to have odds in your favor for both Coronavirus prediction but also how and when the market reacts.

Often times emotions might make you think you have the advantage because you have strong feelings that bias your judgement.

There are various approaches in dealing with volatility.

1. Dips as buying opportunity

Warren Buffett holds stock long-term and views dips as buying opportunities. But his situation may be unique since he has $100+ billion in cash to deploy and his business generate billions in cash every year. So he can be a net buyer of stock every year.

2. Trade volatility

Oftentimes with short-term trading, you’ll need to do smaller bets to mitigate risk but you’ll need to do bets in volume.

Check out the Kelly Criterion on a mathematical approach on how to size bets.

3. Get in to generational 10x company at right valuation, ride out volatility

This is my preferred approach. Check out my video on how to time stock purchases for 10x gains. https://www.youtube.com/watch?v=hyVItZQtzd0

The real-time stock ticker tends to program on minds to focus on the short-term due the instant liquidity without any closing costs it provides. It’s a powerful force, but can provide an edge if you have a long-term perspective and look at the core fundamentals of what makes a company/product successful over time.

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, Elon Musk, Model 3, Model Y, Cybertruck, Investing, China, TSLA Shorts

Subscribe to Dave Lee on Investing on Soundwise

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 video was recorded on the morning of March 2, 2020. The DOW ended up closing the day at 26,703, up 1293 points for the day.

Last week the market sold off due to Coronavirus fears, but today the market rebounded. Tesla Stock (TSLA) ended the day at $743.

When trying to predict what’s the market going to do with news like the Corona virus, often times it’s quite complex. Most of the time people tend to think in black or white, either/or. However, there are many possible scenarios with varying degrees of probabilities.

When betting on this kind of news, there are two main factors:

1. Coronavirus impact

2. How market reacts and when

You could be right on the Coronavirus, but could be wrong on how the market reacts and when.

Determining the how the market reacts and when can be very difficult doe to many factors, such as:

How much market goes down

When it goes down

When it starts going up

Quickly goes up or slowly?

Government actions?

Big money actions

It’s also difficult to predict where Coronavirus will end up in 2-3 month and it’s impact on the global economy.

To bet successfully you need to have odds in your favor for both Coronavirus prediction but also how and when the market reacts.

Often times emotions might make you think you have the advantage because you have strong feelings that bias your judgement.

There are various approaches in dealing with volatility.

1. Dips as buying opportunity

Warren Buffett holds stock long-term and views dips as buying opportunities. But his situation may be unique since he has $100+ billion in cash to deploy and his business generate billions in cash every year. So he can be a net buyer of stock every year.

2. Trade volatility

Oftentimes with short-term trading, you’ll need to do smaller bets to mitigate risk but you’ll need to do bets in volume.

Check out the Kelly Criterion on a mathematical approach on how to size bets.

3. Get in to generational 10x company at right valuation, ride out volatility

This is my preferred approach. Check out my video on how to time stock purchases for 10x gains. https://www.youtube.com/watch?v=hyVItZQtzd0

The real-time stock ticker tends to program on minds to focus on the short-term due the instant liquidity without any closing costs it provides. It’s a powerful force, but can provide an edge if you have a long-term perspective and look at the core fundamentals of what makes a company/product successful over time.

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, Elon Musk, Model 3, Model Y, Cybertruck, Investing, China, TSLA Shorts

Subscribe to Dave Lee on Investing on Soundwise

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 video was recorded on the morning of Feb 27, 2020. The DOW ended up closing the day at 25,774.64, down 1190 points for the day.

My videos typically are streams of consciousness. And especially when I give thoughts on current events, the info and views can be outdated very quickly. Any thoughts, projections, and info shared are of personal opinion at the time of publishing the video, and should not be taken as financial advice. Please do your own research and due diligence, and most importantly make your own decisions.

1. Viewing risk

I typically prefer a long-term perspective that allows me to focus on the business prospects of a company. This allows me to analyze growth, revenue, margins, profits and to give a multiple on the company.

Stock ticker is more a reflection of current sentiment toward that company’s valuation and can fluctuate greatly.

Macroeconomic concerns can also weigh on how investors think about the markets and stocks.

There’s always risk. Some risk is apparent like execution risk or competition.

However, some other risk is not visible. They can be unexpected like a pandemic or a catastrophic event.

It’s difficult for most people to hold these two things in one hand: optimism for the future and sober view of risk.

Oftentimes things that are true are not one-sided, but rather have a deeper complexity.

2. Coronavirus

I give a snapshot view on my thoughts on the Coronavirus with a warning that my thoughts will be outdated in a matter of days. This is only to show how I’m processing today’s events and assessing risk.

The probabilities that the Coronavirus will expand is increasing.

Probabilities are tough to assess because things are always changing and there’s so much unknown.

3. Levered hedge funds

This past week Warren Buffett talked about how interest rates are so low and how that is encouraging borrowing and the use of leverage in investments by various people.

Chamath Palihapitiya was also on CNBC this week talking about the use of leverage with hedge funds and how this could cause a “force” exiting of sorts if the stock market declines further.

Please share this video with others on Reddit, Facebook groups, and forums.

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, Elon Musk, Model 3, Model Y, Cybertruck, Investing, China, TSLA Shorts

Subscribe to Dave Lee on Investing on Soundwise

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 video was recorded on the morning of Feb 27, 2020. The DOW ended up closing the day at 25,774.64, down 1190 points for the day.

My videos typically are streams of consciousness. And especially when I give thoughts on current events, the info and views can be outdated very quickly. Any thoughts, projections, and info shared are of personal opinion at the time of publishing the video, and should not be taken as financial advice. Please do your own research and due diligence, and most importantly make your own decisions.

1. Viewing risk

I typically prefer a long-term perspective that allows me to focus on the business prospects of a company. This allows me to analyze growth, revenue, margins, profits and to give a multiple on the company.

Stock ticker is more a reflection of current sentiment toward that company’s valuation and can fluctuate greatly.

Macroeconomic concerns can also weigh on how investors think about the markets and stocks.

There’s always risk. Some risk is apparent like execution risk or competition.

However, some other risk is not visible. They can be unexpected like a pandemic or a catastrophic event.

It’s difficult for most people to hold these two things in one hand: optimism for the future and sober view of risk.

Oftentimes things that are true are not one-sided, but rather have a deeper complexity.

2. Economic impact of spread

I give a snapshot view on my thoughts will be outdated in a matter of days. This is only to show how I’m processing today’s events and assessing risk.

Probabilities are tough to assess because things are always changing and there’s so much unknown.

3. Levered hedge funds

This past week Warren Buffett talked about how interest rates are so low and how that is encouraging borrowing and the use of leverage in investments by various people.

Chamath Palihapitiya was also on CNBC this week talking about the use of leverage with hedge funds and how this could cause a “force” exiting of sorts if the stock market declines further.

Please share this video with others on Reddit, Facebook groups, and forums.

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, Elon Musk, Model 3, Model Y, Cybertruck, Investing, China, TSLA Shorts

Subscribe to Dave Lee on Investing on Soundwise

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 video was recorded on the morning of Feb 27, 2020. The DOW ended up closing the day at 25,774.64, down 1190 points for the day.

My videos typically are streams of consciousness. And especially when I give thoughts on current events, the info and views can be outdated very quickly. Any thoughts, projections, and info shared are of personal opinion at the time of publishing the video, and should not be taken as financial advice. Please do your own research and due diligence, and most importantly make your own decisions.

1. Viewing risk

I typically prefer a long-term perspective that allows me to focus on the business prospects of a company. This allows me to analyze growth, revenue, margins, profits and to give a multiple on the company.

Stock ticker is more a reflection of current sentiment toward that company’s valuation and can fluctuate greatly.

Macroeconomic concerns can also weigh on how investors think about the markets and stocks.

There’s always risk. Some risk is apparent like execution risk or competition.

However, some other risk is not visible. They can be unexpected like a pandemic or a catastrophic event.

It’s difficult for most people to hold these two things in one hand: optimism for the future and sober view of risk.

Oftentimes things that are true are not one-sided, but rather have a deeper complexity.

2. Economic impact of Coronavirus spread

I give a snapshot view on my thoughts will be outdated in a matter of days. This is only to show how I’m processing today’s events and assessing risk.

Probabilities are tough to assess because things are always changing and there’s so much unknown.

3. Levered hedge funds

This past week Warren Buffett talked about how interest rates are so low and how that is encouraging borrowing and the use of leverage in investments by various people.

Chamath Palihapitiya was also on CNBC this week talking about the use of leverage with hedge funds and how this could cause a “force” exiting of sorts if the stock market declines further.

Please share this video with others on Reddit, Facebook groups, and forums.

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, Elon Musk, Model 3, Model Y, Cybertruck, Investing, China, TSLA Shorts

Subscribe to Dave Lee on Investing on Soundwise

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 video was recorded on the morning of Feb 27, 2020. The DOW ended up closing the day at 25,774.64, down 1190 points for the day.

My videos typically are streams of consciousness. And especially when I give thoughts on current events, the info and views can be outdated very quickly. Any thoughts, projections, and info shared are of personal opinion at the time of publishing the video, and should not be taken as financial advice. Please do your own research and due diligence, and most importantly make your own decisions.

1. Viewing risk

I typically prefer a long-term perspective that allows me to focus on the business prospects of a company. This allows me to analyze growth, revenue, margins, profits and to give a multiple on the company.

Stock ticker is more a reflection of current sentiment toward that company’s valuation and can fluctuate greatly.

Macroeconomic concerns can also weigh on how investors think about the markets and stocks.

There’s always risk. Some risk is apparent like execution risk or competition.

However, some other risk is not visible. They can be unexpected like a pandemic or a catastrophic event.

It’s difficult for most people to hold these two things in one hand: optimism for the future and sober view of risk.

Oftentimes things that are true are not one-sided, but rather have a deeper complexity.

2. Coronavirus

I give a snapshot view on my thoughts on the Coronavirus with a warning that my thoughts will be outdated in a matter of days. This is only to show how I’m processing today’s events and assessing risk.

The probabilities that the Coronavirus will expand is increasing.

Probabilities are tough to assess because things are always changing and there’s so much unknown.

3. Levered hedge funds

This past week Warren Buffett talked about how interest rates are so low and how that is encouraging borrowing and the use of leverage in investments by various people.

Chamath Palihapitiya was also on CNBC this week talking about the use of leverage with hedge funds and how this could cause a “force” exiting of sorts if the stock market declines further.

Please share this video with others on Reddit, Facebook groups, and forums.

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, Elon Musk, Model 3, Model Y, Cybertruck, Investing, China, TSLA Shorts

Subscribe to Dave Lee on Investing on Soundwise