Review of Elon Musk and Tesla News
Hello everyone, welcome! We're reviewing the recent news surrounding Elon Musk and Tesla, particularly the announcement of a potential third political party. This has generated considerable discussion and market reaction.
Initial Thoughts and Stance on Tesla Stock
My primary focus is on my personal investment strategy concerning Tesla. My overall position remains largely unchanged. Here are the main points guiding my decision-making:
- No Plans to Sell Tesla Shares: I do not want to sell my Tesla shares, especially with the imminent launch and scaling of Robotaxi. Selling now would be a regrettable decision.
- Anticipating Continued Execution: I want to see Tesla continue executing on its technology, regardless of Elon Musk's political activities. The progress made on platforms like X (formerly Twitter) and the development of new projects like Model Y and Robotaxi demonstrate ongoing execution.
- Low-Cost Basis Provides Comfort: My relatively low cost basis for Tesla stock provides a buffer against significant losses. This reduces my anxiety even if the stock experiences substantial drops.
- Short-Term Downward Pressure Expected: I anticipate downward pressure on the stock price in the short term (3-5 weeks). I've taken protective measures, but I haven't sold any stock.
Protective Measures and Adjustments
While I'm not selling the stock, I am addressing the potential risks. I've decided to sell Tesla-related products like long-term options, effectively reducing my exposure without completely exiting my position. This strategy is like "putting the foot of the oil door in the tank," preparing for potential volatility.
Analysis of Tesla's Stock Trend
Despite the negative news, Tesla's stock trend today was surprisingly satisfactory. While it did fall by 6.77%, the market reaction wasn't as severe as anticipated. Here's why:
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No Violent Post-Opening Sell-Off: The main selling pressure seemed concentrated during US trading hours. There wasn't a violent sell-off after the market opened.
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Horizontal Trading and VWAP Support: The stock largely traded horizontally throughout the day and stayed above the Volume Weighted Average Price (VWAP), indicating some underlying strength.
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Market Sentiment Shift: The market's initial panic might be subsiding. Some are even suggesting that Elon Musk's political move might have long-term benefits for Tesla.
Comparison to Previous Events
The current drop, though significant, isn't as drastic as the 14% drop experienced on June 5th, following a previous conflict between Trump and Elon Musk. This suggests that the market's sensitivity to such events may be decreasing. The closing price of 293.94 was higher than the day's lowest point of 288.77.
Audience Feedback and Insights
I appreciate the audience members sharing their thoughts on this matter. Their insights provided valuable perspectives.
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Political Parties in the US: One netizen pointed out that many small political parties exist in the US and that Elon Musk's party might not cause a major disruption. The initial response from Trump was also relatively mild.
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Short-Term vs. Long-Term: While long-term benefits are uncertain, short-term risks require attention. Taking protective measures like buying options or ETFs is prudent for those needing insurance against price fluctuations.
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Elon Musk's Personality: One audience member noted that Elon Musk's Asperger's may contribute to his strong convictions and willingness to challenge the status quo, such as establishing a third party to address the national debt.
Market Overview and Performance
The overall market performance today wasn't great, with many stocks declining.
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General Decline: Most companies in the market experienced a decline.
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Consumer Discretionary Weakness: The consumer discretionary sector, impacted by Tesla's performance, experienced the most significant drop.
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Gold as a Safe Haven: Gold demonstrated its role as a safe-haven asset, showing growth while technology stocks declined. Buying gold can serve as a hedge, diversifying portfolio risk.
Conclusion
We need more time to assess the full impact of these events. Address immediate risks first. Thank you for watching!
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