As I write this post, Tesla sits at a new 2 year low. So in other words, all the shares I bought within the last two years were more expensive than they are now, or in other words, I lost money on paper.
The main question about all this is: Will the stock recover? I'm a relatively pragmatic person when it comes to that.There is a lot of talk about Elon Musk going insane, having extreme political views and hurting the Tesla brand, basically chasing customers away. I don't know how much of that is true, but there is one thing that I hold as a very strong belief: Earnings matter.
I don't care WHY earnings are down, if they are down. There were some bullish youtubers predicting super hot numbers for Tesla from the beginning of the year, and then when there were China lockdowns, these people argued that the "fascist" chinese government with its zero covid policy was to blame. Well, who cares why Tesla produced less vehicles than they could have produced? These are the same people who cheered Tesla on for building a production site in a country that is capable of such measures. You can't have the good things without the bad things. That is why, again this time, I don't care if it's Elon's fault, or the woke people's fault, or the mass media. If Tesla does not reach 7$ per share of earnings in 2023, it's a miss in my eyes. Whether that's china's fault, Elon's fault, lithium's fault, I don't care.
Speaking of investing: I have to admit that my obsession with Tesla got the better of me and I am now even more invested in Tesla this year compared to last year. Even now that Tesla is way down, more than 90% of my portfolio is in TSLA. I still have (and will continue to hold) my Broadcom shares that I bought in mid March of 2020. It turns out that this is a gift from heaven, and Hock Tan is an amazing CEO.
Apart from these positions, I don't hold much else. I have a couple hundred bucks in a gold ETC, and I am starting to build a position in commodity stocks. I've started with Glencore, then bought Albemarle, then SQM. I believe that battery material miners can be a good investment now that the overall market is down, inflation is high and these rare metals are critical for the transition to sustainable energy. It's also a good alternative to Tesla, as well as a complimentary investment to Tesla ("go long what Tesla is short").
My priority now is to buy income-generating stocks, so dividends are becoming more important.
Speaking of inflation: This year was crazy with inflation. We saw price increases of over 10% depending on what you are looking at. It's crazy. Milk used to cost 1 Euro a couple of years back, now it's 2 euros. Electricity and heating are up, but not as bad as we tought a while ago.
Oh and by the way, we had parity between the euro and the dollar. Crazy times. Usually you could buy one dollar with 0,80 euros or a little more, but that's it.
2022 was a year that was, to some degree, yet another transitory year. But I did get to travel to the Maldives, which is definitely more than just your average uneventful vacation. So that is something about 2022 that I will remember.
I visited my father around Easter, had another Visit from sister in law in May (and again in december, with her mother).
All in all, the main focus has again been saving money, because there has been a tough down market. Oh year, by the way: Russia invaded Ukraine. I thought I should mention that. It was one of the main reasons for the whole inflation thing.
And because of that, naturally, the markets went down, the central banks started raising interest rates because of inflation, that was the start of the whole bear market. Whether we officially call it a recession now or next year doesn't really matter. I have to keep buying shares, and now that I am done buying Tesla I need to look for high-yielding dividend stocks. Preferably in great industries such as lithium. If I have to, I will also settle with more typical dividend investments, depending on where the markets go.
In hindsight, I would have maybe bought a little less Tesla and more Broadcom and lithium stocks. But now that stocks are down, I can't reverse that course. And when Tesla is back up again, sentiment will have changed anyway, so I will probably be stuck with all those shares one way or another.
Going back to the whole 7$ per share story: If Tesla reaches 7$ earnings per share, the stock should trade at a share price of around 300 dollars, give or take. Not 162 dollars, as it does right now.
But then again, there can be a dozen reasons why that won't be the case. I just try to focus on earnings because that is the long term driver of stock prices. That and the growth rate of the business.
Some of the more bullish people forecast 8, 9 or 10 dollars per share, but I think that these people are the ones who are always excited about everything Elon does and will always point out the positive things while never critizising the bad things.
The longer term view should be more exciting, with products like the Tesla Semi and the Cybertruck growing in volumes. But it does not really matter because we don't know anything until the actual earnings show through. It could go either way anyway.
By the way: I don't care about autonomous driving, FSD, robotaxis. That's just people dreaming in my opinion. If something has the potential to work as a lottery ticket and increase your share price by 10x, why would you make plans for what to do with the money? It either happens or it doesn't. There is no need to plan your finances around something that is so unpredictable. You'll have plenty of time to think it trough if it works. Which is something I don't burden myself with.
What are the plans for next year:
- Buying a new phone (yes, still!)
- Buying a new matress (we got the bed but the new matress is not good enough)
- Buying a new PC (unless a tablet does the job - we are at a weird point in time where PCs seem to be replaced by mobile devices, but they don't fulfil all the tasks of regular PCs yet)
- Saving money strictly for dividend income (no more Tesla shares)
- Waiting for an economic recovery
