2/24/25 - $tsla - High on watchlist to own...

2/24/25 :: VROCKSTAR :: TSLA
High on watchlist to own...

- fundamentally, there's a lot of "if this" priced into the stock, there's no denying it
- even round up '26 FCF from 8 bn (current expectation) to 10 bn and you're at a 1% yield. but also acknowledge... here it is again... "if, then" it's also growing at 100% yoy, and likely dirty cheap too
- seeing that grok 3 deployment, the DOGE work, rockets, video game, edgelord X... let's get this straight, Elon is
1/ not someone to bet against
2/ continues to deliver surprises across the board
3/ is at and defining the intersection of AI, robots, energy and US-first policy

- so while we can look at multiples all day, i think TSLA remains a bet on what Elon can deliver in a 10Y context with a high discount rate.

- if robotaxi, optimus... solar roofs (y'all know my view on solar as % of generation) all come together nicely, there's little doubt in my mind that he's right, TSLA is probably the largest publicly traded company, and make up a number, $10 tn+.

- so if we reduce the probability wave into a duality, "success" and "fail" and nothing in between (for simplicity, albeit an imperfect representation of reality).

- if success is $10 tn in 10 years
- and fail is a bagel ($0) in 10 years
- and we use a LT investment discount rate of 10% ("low enough" to capture the market's current view of stocks at 3-4% for megacap, moat/ validated names but low, but "high enough" to also factor in failure, waiting period etc. etc.)... that $10 tn in today's terms would be 10/(1.1^10) = 3.9 tn. so...

3.9 tn * 10% + 0 tn * 90% = 3.9 tn.
market might be saying... how about it's a 20-25% chance of success and nothing in between. or the market could be saying 10% chance of this success but also many scenarios in between that also give us 1 tn, 2 tn etc. of value. and as a result, the "real" valuation today perhaps does sit closer to that 1tn valuation.

the conclusion, for me, is that technicals matter more for a name like TSLA in the short-term (like they do BTC) than in the long-term as these fundamental factors are delivered (or not) and cash is generated (or not).

the gap fills in the low $200 do catch my eye. those are pretty large gaps. ESPECIALLY the post-election gap, which was more of an "elon benefits from being close to trump" and not necessarily (*necessarily* - though i see it both ways) a speed-up of these above mentioned fundamental factors.

I'd be eyeing the mid 200s to get involved again if/when.

i do think the stock is a LT buy at today's levels. but i just don't like the R/R given the drawdown potential (based on above logic) compared to other opportunities in my book today, namely NXT, BTC, UBER, tsm.

but i'll be watching carefully and i'm willing to jump in higher if i need to. that's cool too. just not yet.

V