Tesla investment thesis

And Tesla, with its best-in-class battery cost and efficiency, and being free of legacy ICE components, allows it to offer the lowest price per mile range. Summary of Bear Thesis Overall, the bear thesis is that Tesla: Faces a stormy industry outlook And rising competition With a poor balance sheet that limits its options And weak, over-leveraged stock holders While showing signs of internal chaos And plagued by a number of known-unknowns, any of which could be a company-killer. Looking forward, things look worse. From The Detroit Bureau : Industry forecasters and some auto executives predict sales this year will fall well below that figure, dropping to under 17 million vehicles for the first time since

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How do you go about creating one? His most helpful responses, however, came in the tesla investment thesis of examples. But first, here is another interpretation of what an investment thesis is and how to create one — straight from my 10th grade English class. Jones’ thesis I’ll never forget the way Ms. Jones I’ve used a different name for privacy taught me to develop a thesis in the first paragraph of an essay. She described it as the bottom tip of an upside-down triangle. Then narrow your writing until it hits a specific point — one powerful sentence that tells your reader the central idea your communicating.

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An investment thesis aims to take an abstract idea and turn into a functional investment strategy. An investment thesis helps investors evaluate investment ideas, ideally guiding them in selecting the best ideas that can help meet their investment objectives. As with any thesis, when new investment ideas are surfaced, the research and methodologies underlying the idea must be taken from abstract concept to formal idea. In the world of investments, the thesis serves as a game plan to help readers understand the big picture and nuances attached to an investment strategy. Most investment theses are in written form, and can be used to look back and analyze why a particular decision was made in the first place—and if it was the right one.

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How do you go about creating one? His most helpful responses, however, came in the form of examples. But first, here is another interpretation of what an investment thesis is and how investmnt create one — straight from my 10th grade English class. Jones’ thesis I’ll never forget the way Ms. Jones I’ve used a different name for privacy taught me to develop a thesis in the first paragraph of an essay.

She described it as the bottom tip of an upside-down triangle. Then narrow your writing until it hits a investmet point — one powerful sentence that tells your reader the central idea your communicating. Little did she know I’d use the advice for investing. I’ve found her approach to have many parallels to the way I develop a thesis for a stock.

After I’ve done my research on a stock, both macro and micro, and I’m ready to make a decision about whether or not I want to invest in the stock, I apply her approach. It usually goes something like this:. Without further ado, here are two examples of theses with a bit of background developed using a similar approach as the one outlined.

An investment thesis for Apple The smartphone market is still growing rapidly. Worldwide smartphone shipments grew Apple’s iPhone segment its highest revenue and most profitable business segment should benefit from this trend. As growth inevitably slows, Apple has built an army of lifelong customers who should prove to be a solid source of sustainable revenue over the long haul.

Thanks to a very valuable brand, Apple’s products boast incredible customer retention from these customers. Importantly, these customers pay premium prices for Apple’s product; this has turned the company into a cash cow. Finally, Apple has consistently proven it has a strategy to jump from one new category to another, elegantly able thesid profitably cannibalize its innovations of the past.

My thesis: Even though Apple’s customers are as loyal as ever and its most important segments are still growing, Apple is priced for low single-digit growth. And healthy cash flow combined with a diligent plan to return cash to shareholders mitigates downside risk. An investment thesis for Tesla In Tesla exploded onto the sceneexecuting far beyond the market’s expectations.

Beforeinvestors weren’t sure whether there was meaningful demand for fully electric cars. Going teskaTesla has proven there is a market. Of course investmrnt company sells every car it makes and continues to be supply-limited, all on an advertising budget of zero.

With big plans for an affordable fully electric car to launch sometime in the next few years, the company is hedging its big bet by rapidly building a network of charging infrastructure to support long-distance travel. My thesis: As the sole player in long-range fully electric vehicles with a significant head start over its potential competitors, Tesla is poised to be a major benefactor in the adoption of electric vehicles over the coming years.

If demand for its luxury Model S sedan is indicative of the zeal the mass market may have have for an affordable fully electric Tesla vehicle, Tesla will soon become a major player in the automotive market. Using theses How do investors use investment theses? Here’s what I’ve found to work: Tesla investment thesis reevaluate your investment thesis every time there is any new meaningful information related to your stock. I’ve found having an investment thesis keeps me calm even in the midst of irrational volatility; it keeps me focused on the underlying business.

As long as my thesis is still intact, everything else is simply noise. Updated: Oct 12, at PM. Published: Jan 4, at PM. He served in the U. Follow him on Twitter for updates. Follow danielsparks. Image thssis Getty Images. Stock Advisor launched in February of Join Stock Advisor. Related Articles. What Is an Investment Thesis?

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Unlike Elon Musk, the largest shareholder of Tesla, who makes decisions for long-term success, CEOs and senior executives of legacy auto makers who are hired hands are more incentivized to run the companies for short-term performance. Copyright Policy. Since then, Tesla has been the first new global brand to emerge. Newsletter Sign-up. I think Palihapitiya is extremely smart and I mostly agree with what he said. However, due to the heavy infrastructure built for decades of offline retail, these large traditional retailers could not compete with the fast-changing consumer demand for online retailing services. And so if you had any concern that there are liquidity issues or tesla investment thesis you have any concerns that the company theais have tuesis sell they get paid .