Tesla
Tesla -> The Strongest Stock Of AllHello Traders and Investors ,
my name is Philip and today I will provide a free and educational multi-timeframe technical analysis of Tesla💪
After Tesla stock retested the last strong support zone for bulls, the 0.786 fibonacci level at the $100 level, the recent pump over the past couple of months of more than 100% was no surprise at all.
On the weekly timeframe you can see that Tesla stock is still in an overall strong bullish market, there is resistance coming in at the $320 level but until then there is no reason why Tesla stock should start a correction.
Looking at the daily timeframe you can see that Tesla stock is once again creating a new swing high and there was no bearish rejection at the previous resistance at all - therefore I simply do expect another rally of 15% towards the upside to retest the weekly resistance at the $320 zone.
Keep in mind: Don't get caught up in short term moves and always look at the long term picture; building wealth is a marathon and not a quick sprint 📈
Thank you for watching and I will see you tomorrow!
My previous analysis of this asset:
TSLA Chart Reading - Plan01 Introduction 01.01Howdy Traders!
This idea is more of an informational piece as opposed to an idea representing a strong trend headed in a certain direction.
Recently, we saw a strong bullish trend for $NASDAQ:TSLA. Many are wondering to what point this is all headed towards, and at what point the reversal will begin. The hopes of this post is to address this question.
When looking at a daily time frame, a trend-line can be drawn connecting all of the high points NASDAQ:TSLA created over the long span of time (last few years). In this chart I posted, it is represented as the blue trend-line (currently sitting at around the $290.50 levels). NASDAQ:TSLA is now approaching this level closer and closer day to day, and chances are that NASDAQ:TSLA will reject this resistance the same way it has in the past 3 separate occasions. NASDAQ:TSLA has two scenarios once it hits this level.
Scenario #1 (Bearish):
It hits this level, does not break through, and the price heads downwards to no certain price level.
Scenario #2 (Bullish):
NASDAQ:TSLA breaks the price level of $290.5, and will most likely come back down to retest this level. This first obstacle will be to break through the $314 level. If the bullish trend remains strong, NASDAQ:TSLA will have a really high probability in creating a new all-time-high of $415.19.
I will call this plan "Plan01", and will keep everyone updated on how it goes over time. If NASDAQ:TSLA does not break the $290.50 level, then this plan won't work. However, if it does, then Plan01 is in motion.
Bona Fortuna! (Good Luck)
Tesla's stock trend is likely to rise and fallIs Tesla's stock likely to turn bullish into bearish?
This chart shows the weekly candle chart of Tesla's stock over the past two years. The top to bottom golden section of November 2021 is superimposed in the figure. As shown in the figure, Tesla stock has already surpassed the 1.618 position on the golden section in the past two weeks, and is about to challenge the next strong pressure, which is the 1.382 position on the golden section in the figure! Due to factors such as the global consumer downgrade and the imminent launch of Tesla's affordable models, Tesla's stock is likely to turn bullish into bearish! In the future, just use the 1.382 and 1.000 positions of the golden section in the figure as the long short water separation interval operation! Sell high and buy low within the range, and chase up and kill down outside the range!
A trader’s playbook: can a USD in motion remain in motion?It was a huge week for USD traders and the USD remains the central focus of clients and wider market participants this week. US data is lighter on the ground and with the Fed in its blackout period, we are in cruise control into next week’s FOMC meeting, where a 25bp hike is an almost done deal.
Will this hike prove to be the last in the cycle?
The market is certainly feeling higher conviction that US inflation is trending in the right direction, and the moves in forward interest rates markets, to revisit price cuts in 2024, were the key reasoning why the USD has been so heavily sold. We can look at the SOFR interest rate market and see on Thursday that an aggressive -160bp of cuts were priced for 2024, although this has come back on Friday closing at -148bp. The USD and gold are moving closely to these expectations and the degree of easing from the Fed from March 2024.
The FX market is front running possible normalisation of Fed policy in 2024, and this is lifting risky assets and high beta FX (NOK and SEK especially). The question then is whether the USD sell-off has gone too far and we are at risk of mean reversion early this week – the upside in the USD will likely see equity markets finding better sellers, which all saw big gains last week.
US and Asia corporate earnings roll in this week, with SAP also getting a focus for GER40 traders, and in a quiet data week earnings may play an influence. There is also a focus on the special rebalance of the NASDAQ, which aims to reduce concentration risks (www.axios.com)
We start the week on a quiet tone with Japan offline for Marine Day and the potential for HK markets to close as tropical storm Talim is upgraded to a no. 8 typhoon signal.
As the week rolls on though one of the key topics of conversation is whether the BoJ alter its YCC policy at the BoJ meeting on 28 July – recent press suggests moving the 10yr JGB (Japan govt bond) cap (currently set at -/+0.50%) set by its YCC program is a real possibility. Should they move it to 0.75% or even 1% it could have big implications for the JGB market and by extension the JPY.
We’re coming off a big week for the US rates market and the USD is moving very closely in alignment to this pricing – the market sees the Fed cutting before other DM central banks and by a greater degree. This is something the market is very keen to explore and could have far-reaching implications for the USD into Q3 and certainly Q423.
Rearview alpha plays - what worked best last week:
• G10 and EM FX play of last week: Short USDSEK (-5.4% WoW), short USDHUF (-4.9% WoW)
• Equity index plays - long FRA40 (+3.6% WoW), long AUS200 (+3.4% WoW), long NAS100 (+3.4% WoW)
• Commodity plays – Long Copper (+3.9% WoW), Long XAGUSD (+8% WoW)
• Equity plays for the radar – Tesla (report earnings after market Wednesday) – the implied move (on the day of earnings) is 3.5%. The stock is looking for direction with the bias defined by a break of $284.25 or $265.10. Netflix report earnings at 6 am AEST on Thursday, with the market seeing an implied move of 4%.
• Crypto plays: Long XRP (+53.4% WoW)
Marquee event risk for the week ahead:
• US 2Q earnings – in the week ahead we receive earnings from 11% of the S&P500 market cap. Trader favourites include Bank of America, IBM, Morgan Stanley, Goldman Sachs, Netflix, Tesla, and AMEX.
• For GER40 traders, do consider that SAP SE report Q2 23 earnings on 21 July (aftermarket) – SAP holds a 9.4% weighting on the GER40, making it the biggest index weight, and therefore any outsized moves in SAP could influence the index - Can we see SAP break above E130 and to the highest levels since Oct 2020?
• UK CPI inflation (Wed 16:00 AEST) – The market expects UK core CPI to remain at 7.1%, while headline inflation is expected to fall to 8.2% (from 8.7%). The last 4 UK core CPI prints have come in well above expectations. With the market pricing 45bp of hikes from the BoE at the 3 Aug meeting, we’d need to see a huge downside surprise (in core CPI) to lower expectations that the BoE will hike by a further 50bp.
• Australia (June) employment report- (Thurs 11:30 AEST) – the median expectation is that 15k net jobs were created in June, with the unemployment rate remaining at 3.6%. While we look ahead at next week’s Aus Q2 CPI, the jobs report could influence expectations of RBA action on 1 August, which is priced at a 36% chance of a 25bp hike.
• Japan CPI inflation – the market sees JP headline inflation rising to 3.3% (from 3.2%), while core is eyed at 4.2% (4.3%) – with the market debating whether the BoJ alters its Yield Curve Control (YCC) program at the 28 July BoJ meeting, this data could influence that debate and potentially result in further pronounced moves in the JPY.
• China Q2 GDP (Mon 12:00 AEST) – expectations are for a rebound in GDP to 7.1% YoY (from 4.5% YoY). At the same time, we also get China’s industrial production (consensus at 2.5%), retail sales (3.3%) and fixed asset investment (3.4% YoY). Watch price action in CHINAH, copper, USDCNH and the AUD over this data.
• US retail sales (Tue 22:30 AEST) – it’s a quiet week for US economic data with US retail sales and various housing data points among the highlights – the market eyes 0.5% MoM retail sales growth.
• EU CPI (Wed 19:00 AEST) – the central case is for core inflation to remain at 5.4%, while headline CPI is expected to fall to 5.5% (from 6.1%). A 25bp hike at the next ECB meeting is a near certainty, but a lower inflation print may see longer-term expectations fall.
• Canada CPI inflation (Tues 22:30 AEST) – the market sees headline CPI at 3% (from 3.4%), and the core median at 3.7% (3.9%). The next BoC meeting isn’t until 6 September, so this CPI print may fail to move the CAD too intently.
• NZ CPI inflation (Wed 08:45 AEST) – The market sees NZ inflation running at 5.9% YoY (from 6.7%), and 0.9% QoQ – One for the NZD traders, but unless we get a blowout number the RBNZ should hold rates steady at the next meeting on 16 Aug.
• South Africa central bank (SARB) meeting (Thurs - no set time) – One for those running USDZAR exposures, but the prospect of a 25bp hike to 8.5% seems likely.
• Turkey central bank (CBT) meeting (Thurs 21:30 AEST) – the market expects the CBT to hike the one-week repo rate to 18.25% (from 15%) – eyes on your USDTRY exposures.
Fed speakers – With the Fed entering its blackout period, we see no Fed speakers until the FOMC next week.
ECB speakers – Lagarde, Lane, Vasle, Elderson, Vujcic, Villeroy
BoE speakers – Ramsden
RBA speakers – no individual speakers – RBA July meeting minutes (Tues 11:30 AEST)
TESLA: Can the minor uptrend win?
Channel
- A minor uptrend exists within a main downtrend. For TESLA to officially transition into an uptrend, it must break the main downtrend and surpass the significant prior high at $313.5.
Symmetrical projection: An uptrend N pattern
- By projecting a 100% symmetry projection of the initial swing from point A to B, and extending it from point C.
- As the expected symmetric pullback to E from D did not occur, I anticipate a further 100% extension of the primary bullish momentum (A to B) from D to F ($384.6). The target price level aligns perfectly with the starting point of the primary downtrend, further enhancing the significance of the target price.
Resistance level on the way
- The significant prior high at $313.5 represents a critical resistance level as the market must break through it to officially reverse the downtrend.
Support/ Defence levels for bulls
- The prior low at $241 is a key support level that shouldn’t be broken, if the market intends to sustain the uptrend. The level aligns with two critical Fibonacci levels, adding its importance.
The 0.5 Fibonacci retracement level of the primary downtrend from point X to point A.
The 0.618 Fibonacci retracement level from point C to point F (assuming the target price of $384.6 marks the end of the uptrend).
- If the price manages to sustain above the current level at $268, it would create the ideal scenario for a healthy uptrend. This is because $268 serves as both the original target price at level D and the 0.786 Fibonacci retracement level of the nearest downswing from point X to point A.
**Not Financial Advice**
The information contained in this article is not intended as, and should not be understood as financial advice. You should take independent financial advice from a professional who is aware of the facts and circumstances of your individual situation.
TSLA: Expanding Channel Signals Critical JunctureTSLA is currently exhibiting a prominent expanding channel on the weekly timeframe. The price is nearing the weekly resistance, which also coincides with the upper boundary of the expanding channel. At this juncture, two scenarios are possible. Firstly, if the price adheres to the resistance level and the upper boundary, we can anticipate a downward movement, leading to a potential market downturn. Conversely, should the price exhibit a bullish breakout above the resistance and upper boundary, we can expect the rally to continue with renewed momentum.
Tesla's 2000 Cybertruck Production Underway!As you may already know, Tesla has officially commenced the production of 2000 Cybertrucks this year, and we believe this development presents a unique opportunity for traders like yourself.
Tesla has consistently demonstrated its ability to disrupt the automotive industry, and the Cybertruck is no exception. With its futuristic design, cutting-edge features, and impressive performance capabilities, the Cybertruck has garnered immense attention and anticipation from consumers worldwide.
Given Tesla's track record of delivering groundbreaking products, we believe that the production of 2000 Cybertrucks this year will undoubtedly significantly impact the market. As traders, it is essential to stay ahead of the curve and seize opportunities that arise from such developments.
Hence, we encourage you to consider placing Tesla market orders, considering the potential impact of the Cybertruck production. However, we advise approaching this opportunity cautiously, as any investment involves inherent risks. Conducting thorough research, analyzing market trends, and consulting with financial advisors is crucial to making informed trading decisions.
Tesla's market orders for the Cybertruck are expected to surge in demand, especially with the growing interest from individual consumers and commercial buyers. By placing market orders, you can benefit from the potential rise in Tesla's stock value, which has historically responded positively to significant product launches.
To capitalize on this opportunity, I recommend visiting Tesla's official website or contacting your trusted brokerage firm to place your Tesla market orders. Remember to evaluate your investment strategy and risk tolerance before trading carefully.
As always, staying updated with the latest news and developments surrounding Tesla and the automotive industry is essential. By closely monitoring market trends and emerging technologies, you can make informed decisions that align with your trading goals.
$NIO is turn to stage 2 ?NYSE:NIO is nearly turn to stage 2
Technical Analysis Big picture:
1) NYSE:NIO is going on down trend for a year and 3 month ago just have low volatility and low volume
2) Make Sideway down and forming wedge shape with RSI overdrive up. Possibility highly to make U-turn
3) HSI index make pattern H&S. If complete price break upper resistant it's time of chinese stock rally
4) Now it has 2 resistant to confirm stage 2 is breaking EMA200 and Breaking base of wedge shape to confirm
Technical Analysis Small picture:
- NYSE:NIO break the wedge and make lower high forming picture Cup and Handle
Hope NYSE:NIO get well soon
Good Luck
SPX/ES - An Analysis Of The 'JPM Collar'Over the last two quarters, financial social media has cared a lot about the "JPM Collar," a series of very large options trades that JP Morgan uses in one of the funds it offers its clients.
The theory for speculators is that the JPM collar will be used to constrict the market within a certain range. But as for how that plays out, it's hard for a trader to anticipate, especially amid the daily chop.
The levels are on the chart and you can reference them yourself. Below is a print of monthly bars, which is easier to see since I have to compress the TradingView chart to make the bars work:
If you're not familiar options, the general idea is this:
These options blocks expire September 29
JPM will lose a lot of money if price is over 4,665 or starts to approach 4,665, especially if it happens right away
JPM will lose a lot of money if price goes under 3,550, especially if it happens right away
JPM will lose a lot of money if price goes under 4,215, especially if it happens right away
But a nuance of being long 4,215 calls is that if price is significantly over 4,215 by September, they will make a lot of money on their calls.
Geopolitical Risks
Before we begin, I'll warn you, as I do in every post, that the geopolitical situation is tense. NATO is at war with the Russian Federation inside of Ukraine and the International Rules Based Order is always talking about "de-risking, but not decoupling" from Mainland China under President Xi Jinping.
The risk for markets is, short of a situation where a tectonic/geothermal event surprises everyone and causes the crash of crashes, is that Xi gets up one night and throws away the Chinese Communist Party.
Since Beijing business hours are New York night, you'll wake up to quite the gap down that will be hard to recover from, for the Chinese Communist Party and former Chairman Jiang Zemin and its cronies are guilty of the 24-year-long persecution and genocide against Falun Dafa's 100 million practitioners.
The Call
The most most notable thing about price action is as June closed, range equilibrium between the June high and the October low is exactly 4,000.00 points.
Something else I stumbled upon when preparing for this post is that when comparing the Dow, Nasdaq, and SPX futures monthly bars, the three have completely converged.
This is the first time since the **2022 top** that this has happened.
You can see it on the weekly as well
There used to be quite the delta, which allowed for stock picking and trading. If you ask me, what three memelines coming together all at once means is that the markets reached peak overbought, and genuine "overbought" isn't something you can see with an indicator.
The daily shows this really only manifested in June.
There are some problems with more uppy, as I explain in my calls below on the VIX, which needs to go up so that whales can go back to collecting free money selling volatility:
VIX - The 72-Handle Prelude
(But note that under the current conditions being summer and we're not that bearish right now, we may only see VIX 50)
And the fact that the Nasdaq is just so far away from its trendline that going more parabolic is hard to believe.
Nasdaq NQ - A Fundamental and Technical Warning Signal
I don't normally call exact areas, but I put a white box with a dolphin because I think price is going there, and will do so fast, like, mid-August fast.
That box means 3,778~.
This means JPM will be green on out of the money calls, red on its own calls, and red on the 3,550 puts.
But JPM doesn't lose money to begin with because they're hedged and will be compensating for the drawdown in other ways, like the alpha they'll generate from going big block long in the dumps under 4,000.
The other advantage is it will trap bears who think it's finally the apocalypse they've long been awaiting for the ponzi to go to zero, and they'll buy puts and buy puts even though the iVol is insane from VIX being over 50.
Once the craziness is done, the markets will recover, and whoever sold will probably by trapped.
So, be careful out there. Wall Street's best laid plans can be blown to pieces in an hour by Heaven, for men are no better than mice in this boundless Cosmos.
Tesla -> EV Market On FireHello Traders and Investors ,
my name is Philip and today I will provide a free and educational multi-timeframe technical analysis of Tesla 💪
After Tesla stock retested the last strong support zone for bulls, the 0.786 fibonacci level at the $100 level, the recent pump over the past couple of weeks was no surprise at all.
On the weekly timeframe you can see that Tesla stock is currently retesting previous weekly structure and since Tesla is a little bit overextended we could see a short term drop from here.
However by looking at the daily timeframe you can also see that Tesla stock is not slowing down at all so not all three timeframes are pointing towards more growth yet so I am waiting for a daily and weekly break above the current resistance level and then I do expect more bullish upside.
Keep in mind: Don't get caught up in short term moves and always look at the long term picture; building wealth is a marathon and not a quick sprint 📈
Thank you for watching and I will see you tomorrow!
My previous analysis of this asset:
TESLA and FORD: Unlikely Collaboration Shakes Up the EV IndustryIn the world of business, collaborations between competitors are rare occurrences. However, an unexpected turn of events recently took place when Tesla, the prominent electric vehicle (EV) giant, and traditional automaker Ford surprised Wall Street by joining forces. This partnership entails Ford customers gaining access to Tesla's supercharger network for charging their vehicles.
The announcement came during a Twitter-spaces event where Ford CEO Jim Farley engaged in a conversation with Elon Musk to discuss the electric vehicle industry. This collaboration aims to provide satisfaction to Ford's customers while potentially benefiting Tesla's shareholders.
This development has the potential to create a lucrative revenue stream that could significantly enhance Tesla's financial resources. Here are the key details you need to know.
As electric vehicles bring about a technological shift, the establishment of charging infrastructure becomes crucial to support the growing number of EVs on the roads. Unlike refueling a car at a gas station, charging an electric vehicle requires compatibility between the vehicle's charging ports and the attachments at the charging station.
Tesla introduced its proprietary charging standard called the North American Charging Standard (NACS), which is used in all its vehicles and charging stations in the United States and Canada. However, many of Tesla's competitors have adopted a different design known as the Combined Charging System (CCS) and consider it the industry standard for electric vehicles. With Tesla having sold more vehicles than its competitors, who are still scaling up their production, the question arises: which design should be considered the true standard?
In an effort to enhance customer experience and boost its EV sales, Ford has strategically decided to leverage Tesla's well-established charging network. As part of the partnership, Ford will provide adapters that enable their current electric vehicles to connect with Tesla's NACS ports instead of the CCS standard. This collaboration holds significant potential for the EV industry as a whole, as increased adoption of the NACS design would further solidify Tesla's position as a market leader. More vehicles utilizing the NACS standard would result in higher charging traffic for Tesla.
This move presents an excellent opportunity for Tesla to generate profitable revenue by attracting non-Tesla drivers to its charging network. Since Tesla has already invested substantial capital in building and expanding its charging infrastructure, any additional payments received from non-Tesla vehicles would greatly contribute to its bottom line.
The exact pricing structure for Ford owners to use Tesla's network is yet to be determined, but there are some indicators. Tesla charges its customers based on kilowatt-hour usage, and non-Tesla users typically pay a premium compared to Tesla owners. Tesla also offers a monthly subscription option priced at $12.99, which reduces the kilowatt-hour rate to match that of Tesla owners. This could give us an estimate of what Ford users might expect to pay.
Currently, revenue from paid supercharging represents a small portion of Tesla's overall business, categorized under services and other in its financial reports. In the first quarter, this revenue segment amounted to $1.8 billion out of a total of $23 billion. Therefore, investors should not expect an immediate significant impact from partnerships like Ford's. However, as electric vehicles still account for just 1.5% of the global fleet, revenue from services like charging has the potential to grow into a substantial category in the coming years.
The partnership between Tesla and Ford can be seen as a strategic move in the ongoing competition within the EV industry. As the industry is still in its early stages, with battles over industry standards and market dominance taking place, it is crucial for investors to closely monitor Tesla's performance.
However, it may not be the most opportune time to purchase Tesla shares, considering their 66% increase since January. The company could start to feel the effects of an economic slowdown, leading analysts to revise their expectations for earnings growth. Additionally, Tesla's inventory has been accumulating each quarter, and price cuts have significantly impacted its operating profit margin, which declined by 779 basis points year over year in the first quarter. Furthermore, the current price-to-earnings (P/E) ratio of 58 might be considered too high.
Given Tesla's stock volatility, with a beta of 2, investors may find buying opportunities in the future. It is advisable to wait for such opportunities before making a decision to invest in Tesla shares.
While the partnership between Tesla and Ford is indeed a noteworthy development in the EV industry, it is important to consider the broader market conditions and evaluate Tesla's financial performance before making any investment decisions. Keeping a close eye on the company's earnings reports, market trends, and potential growth prospects will be crucial for investors looking to capitalize on the evolving landscape of the electric vehicle market.
As the industry continues to evolve and competition intensifies, collaborations like the one between Tesla and Ford demonstrate the willingness of companies to explore innovative solutions and drive the widespread adoption of electric vehicles. This partnership could pave the way for more collaborations and advancements in the industry, ultimately benefiting consumers and contributing to a sustainable future.
However, investors should exercise caution and conduct thorough research before making any investment decisions. The dynamic nature of the electric vehicle market and the potential impact of various factors, such as government policies, technological advancements, and market demand, can significantly influence the performance of companies like Tesla.
In conclusion, the Tesla-Ford partnership marks an unexpected collaboration between two major players in the electric vehicle industry. While the specific implications and financial impact of this alliance are yet to be fully realized, it highlights the evolving nature of the market and the potential for innovative partnerships to shape the future of electric mobility. Investors should closely monitor Tesla's performance and market trends to make informed investment decisions in this dynamic and rapidly growing industry.
Why the Nasdaq may not capture the full growth potential of AIThe start of 2023 has marked the return of tech growth stocks alongside the surge of generative artificial intelligence (AI) and large language models (LLMs). The biggest tech companies in the world have benefitted from the buzz created by ChatGPT and rapidly rising enthusiasm around AI in general. Nvidia, a leading semiconductor company seen as one of the main AI beneficiaries, has advanced the most within the Nasdaq-100 and even joined the trillion-dollar market cap club just weeks ago.
The year-to-date rally of ‘Big Tech’, led by Nvidia, has resulted in a strong return differential of 22.33%1 between the widely followed tech gauge (the Nasdaq-100) and the broad equity exposure (the S&P 500). The top 10 holdings in the Nasdaq-100 by contribution to return (CTR) have jointly posted 30.45% year-to-date, representing more than 82% of the total index return. This advance of the top Nasdaq-100 holdings, capitalising on the buzz around AI, is begging the question from investors whether allocation to the Nasdaq-100 already offers good exposure to the long-term investment potential associated with the AI megatrend.
To answer this question, we have to take a step back and think of the concept of megatrends and benchmarks in the portfolio construction process. Benchmarks are usually viewed by investors as a core allocation, while thematic investing is being used as a return enhancement play that benefits from the evolution of various megatrends. In the case of the Nasdaq-100, we can point to several arguments why a thematic strategy focused on the AI theme might be a better option if an investor’s goal is to benefit from the long-term growth potential offered by AI.
1. The AI space represents a wide variety of areas that can achieve wider adoption and success at various points in the future. A targeted AI strategy can build exposure to the theme and its evolving trends through a diversified basket of more pure-play companies involved in various AI activities. In turn, the Nasdaq-100 will tap into the space only through a handful of companies that would offer a less comprehensive and less pure exposure to the theme.
2. A targeted AI strategy has the potential to capture the mega caps of tomorrow early on and with a meaningful weight within the portfolio. Investing in AI through the Nasdaq-100 might be seen by investors as a safe way to avoid losers and focus on more successful AI companies that made it into the benchmark. However, this approach does not allow investors to reap the return potential associated with exciting smaller companies early on. After all, the growth potential driving the returns in the tech space is highest for smaller and younger companies.
Investing Tesla and Nvidia (the latest two companies that managed to hit a $1 trillion market cap) in them 3 months after they went public would have resulted in much higher annualised returns in comparison to returns after they joined the Nasdaq-100. In addition, it took both companies around 2-3 years to join the tech benchmark and, after they did, their starting weights were only 0.40%-0.50%. In contrast, thematic strategies might invest in companies shortly after their IPO (initial public offering) dates and might allocate a more meaningful weight to them.
3. A satellite thematic exposure can improve the risk-adjusted portfolio returns through increased diversification. The concept of diversification was first formalised by H. Markowitz as early as in 1952. However, in practice, it’s not feasible to hold all stocks in the investable universe and investors stick to broad benchmarks to build their market exposure. In this situation, thematic investing represents a novel way to split the universe of investable companies and identify promising opportunities aligned with megatrends shaping our future. Relatively low overlap of thematic strategies with broad benchmarks is what makes them particularly attractive for a satellite exposure.
Trying to kill two birds with one stone (that is, building a core tech exposure and capturing the potential of the AI theme) by using the Nasdaq-100 could backfire. It could deteriorate diversification and risk-adjusted returns for two reasons: 1) Sticking just to AI companies within the Nasdaq-100 narrows down the return drivers associated with the AI megatrend; 2) Investors increase idiosyncratic risks in their portfolios associated with the biggest tech companies, most likely captured in some other portfolio allocations, for example, the S&P 500.
Thematic strategies specifically focused on AI might represent a better option for investors seeking to benefit from the long-term growth potential associated with the megatrend in contrast to the theme exposure offered through the Nasdaq-100. When selecting the specific AI strategy it’s important to understand how each strategy captures the space and to align it with investor’s beliefs about the future development of the megatrend. Diversification benefits and potential return drivers associated with the theme are yet other important considerations that help to govern the strategy selection process.
Sources
1 As of 27 June 2023.
This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
Tesla: The Only Foreign Automaker Committed to China's CompetitiI am excited to share that Tesla, the renowned electric vehicle manufacturer, has become the only foreign automaker to sign China's competitive pledge. This remarkable commitment showcases Tesla's dedication to the Chinese market and its determination to lead the sustainable transportation revolution in the region.
China, the world's largest automotive market, presents immense potential for growth and innovation. By signing this pledge, Tesla has positioned itself as a unique automaker in China, setting it apart from its competitors. This move solidifies Tesla's presence in the Chinese market and reinforces its commitment to fostering healthy competition and driving the industry forward.
As savvy investors, we must identify companies with a competitive edge, especially in emerging markets like China. Tesla's decision to sign this pledge highlights its strategic vision and ability to adapt to local market dynamics, which bodes well for its long-term success.
I encourage you to take a closer look at Tesla's operations in China as they continue to expand its manufacturing capabilities and strengthen its foothold in the region. By doing so, you will gain valuable insights into the company's growth potential and ability to capitalize on the immense opportunities presented by the Chinese market.
As with any investment, thorough research and analysis are essential. I recommend exploring Tesla's recent achievements, such as the impressive sales figures and the positive reception of their locally produced Model 3 in China. These milestones validate Tesla's commitment to the Chinese market and provide a glimpse into the company's future prospects.
In conclusion, Tesla's status as the only foreign automaker to sign China's competitive pledge is a significant milestone that sets them apart. Their unwavering dedication to the Chinese market positions them as a unique player in the industry, making them an intriguing investment opportunity.
I encourage you to delve deeper into Tesla's operations in China and assess its potential impact on its growth trajectory. We can make well-informed investment decisions that align with our goals and aspirations by staying informed and proactive.
Thank you for your time, and I wish you continued success in your investment journey.
TESLA LONG AT THE PARABOLIC INFLECTION POINTmy thesis is that Tesla is now a matured, deep moated, multi-sector innovation enterprise
areas of focus
transporation
manufacturing
commodities
logistics
big data
synthesizations
memetics
artifical intelligence
debt leverage
decentralization
neo-feudal globalization
I'm Long Here.