My Investing Muse

  Buy the dip (BTD) is a term that has come up recently with the 2022 market having a redstart.  when we buy the dip, it is with intent to sell at a profit when the stock price recover as the market does swing between overbought and oversold regularly. this seems like a good strategy. I would like to suggest for us to consider another strategy. it is not just about  buying the dip , but let us consider  buying after dip (BAD).  for investment, we understand that the longer the timeframe, the fewer false signals we will get from the charts.  for us to be successful, let us consider the following: 1. qualify the company's financial fundamentals - improving profits, balance sheet, free cash flow and EPS. 2. consider using a 1 Day or 1 Week chart to ascertain the reversal of the downtrend. 3. company has durable competitive advantages 4. good management 5. good margin of safety that is buying the stock at a good discount....

  What caused ‌ $Tesla Motors(TSLA)$   ‌stock to fall by over 11% after a record-breaking quarterly earnings report?  Before we dive into details, let us not forget Elon the visionary.  From SpaceX, Starlink, the Boring Company and a future of autonomous, sustainable transport, he has seen the future that most of us cannot imagine.  With this backdrop, let us look into the various reasons for the fall of the stock price: 1.  The delay of the $25,000 Tesla This was deemed by the news to be the main reason for the fall.  As per CNBC, Elon later explained that  Tesla’s driverless tech should eventually be so advanced that it will drive sales of the company’s electric cars to the anticipated high volume of sales with or without adding new models at lower price points .  This did not sit well with the market. Extract from findmyelectric.com about the prices of Tesla in USA for 2022 dated 1st Jan 2022: The Tesla lineup for 2022 (Model S, ...

  ‌ $Tesla Motors(TSLA)$   ‌had a great Q4/2021 and here are some of the key highlights from their earnings: With 2021 deliveries up by 87%, Tesla achieved the highest quarterly operating margin - a testament that EV can be more profitable than ICE vehicles.   If there is only one metric that we look into for any business, it has to be  free cash flow (FCF) .  For us to appreciate the magnitude of growth, I have thus chosen to focus on the YoY comparisons. Some of the following are extracted from their earnings report: Cash Operating cash flow less CAPEX (free cash flow) of $2.8B in Q4 In total, $1.5B increase in our cash and cash equivalents in Q4 to $17.6B Profitability   $2.6B GAAP operating income; 14.7% operating margin in Q4 $2.3B GAAP net income; $2.9B non-GAAP net income (ex-SBC ) in Q4 30.6% GAAP Automotive gross margin (29.2% ex-credits) in Q4 Apart from an outstanding quarter, I have chosen to show the unaudited annual financial summary.  Th...

F or some of us, we look at value and growth stocks as 2 sides of the same coin, as 2 separate camps. I n our minds, a high growth stock may not be a value stock and vice versa. let me put in context what criteria I use to qualify stocks as a " value " stock: 1.  good financial fundamentals  (good trend of revenue, net income, net debt and free cash flow, seen only years and not just in quarters) 2.  durable competitive advantage  - in branding, price positioning, cost leverage, technology, innovation 3.  good management with integrity 4.  margin of safety  - market price being offered with a discount. this includes calculating the intrinsic value or fair value of the business using FCF or DCF, etc 5.  Know the business  - as investors, we need to understand the business products and services, the market reach, the industry, etc. some of the high growth stocks promise future profits thanks to their innovations. These cannot be considered valu...

The Cboe Volatility Index (VIX) is a real-time index that represents the market’s expectations for the relative strength of near-term price changes of the S&P 500 index (SPX).  This is also known as the "Fear Index" in relationship to S&P 500.  Thus,  ‌ $Cboe Volatility Index(VIX)$   ‌usually move in the opposite direction against the theS&P500 index ‌ $S&P 500(.SPX)$   ‌. When there is more fear (VIX) ie uptrend, the S&P500 would usually move downtrend and vice versa. There are typically 2 price actions involving VIX: 1.   VIX Spike  - this is characterised by a sudden move up and pull back quickly. This usually implies short term panic.  For some traders, this can be interpreted as a buying signal as this is usually shorter-term (lasting a few days). 2.   VIX Swell  - this is a slow but gradual move up while the market rallies.  However, VIX and S&P500 moving together in the same direction is a warning whic...

 ‌ $U.S. Bancorp(USB)$   ‌price fell after a disappointing earnings report as of 19 Jan 2022.  Does this imply a signal to sell? Q4 EPS falls from Q3, on lower net interest income, lower loan fees (SBA Paycheck Protection Program), "seasonally" lower payments and capital markets revenue, and lower mortgage banking revenue as refinancing continued to decline.  Q4 EPS of $1.07 dropped from $1.30 in Q3 2021 but it was an increase from $0.95 in Q4 2020; a marginal miss of market estimate at $1.10. Net income attributable to U.S. Bancorp was $1,673 million for the fourth quarter of 2021, which was $154 million higher than the $1,519 million for the fourth quarter of 2020, and $355 million lower than the $2,028 million for the third quarter of 2021. Diluted earnings per common share were $1.07 in the fourth quarter of 2021, compared with $0.95 in the fourth quarter of 2020 and $1.30 in the third quarter of 2021. For full-year 2021, earnings per share came in at $5.10 per s...

Twitter user herbertong shared a very good overview of Tesla's key milestones for 2022. of course, these may change but this puts together a good overview of the progress of  $Tesla Motors(TSLA)$ . on top of the launch of Giga Texas & Berlin, Shanghai is also in the midst of expansion.  we will see more states offering Tesla insurance. Tesla energy will see expansion and a mega battery plant will be opened. new models will continue to be rolled out and both semi and cybertrucks will see more traction.  Innovations for 4680 batteries, Tesla Bot, FSD will also bring forth more opportunities. 2022 will be an exciting year for Tesla shareholders.  while there are challenges in the supply chain, weather & COVID, let us look forward to the realisation of these milestones.

D uring a recent interview with Yahoo Finance,   Ray Dalio has shared his concerns that Cryptocurrencies may be outlawed .  Governments would want a monopoly on money and they have concerns that Cryptocurrencies may jeopardise their currencies' role - leading to depreciation & dilution of value.  Mr Dalio has also expressed his preference for gold over Bitcoin (BTC) despite their performance.  However, this does not stop Mr Dalio from owning some cryptocurrencies. The volatility of BTC can render its own downfall, as a medium of exchange.  Of course, the people would not mind when BTC appreciated but it could also post equal downside.  For regular citizens, the drop of value from USD$63,000 to USD$28,000 within 3 months (Apr 2021 to Jul 2021) can lead to much chaos.    On its way to being a successful currency, cryptocurrency will be a threat to the legal currencies , thus, leading to a possible ban.  India and China have respectivel...

  Learning is a lifelong journey . Let us read so that we can get better with our investment strategy, mindset and values. Read so that we can keep current with the trends, changes, developments.  Read so that we can improve our odds, learn from the lessons of another - so that we can avoid and/or learn from them accordingly.  I do not think that I am smarter or better than the fund managers, but I still have a good chance of being successful if I work hard to read up, study, listen to interviews and analyze the annual and quarterly reports.   Personally, hard work can be a stronger competitive advantage than being smart.   If we take time to read up on household items, mobile phones or cars before we purchase, we should do the same for investing.  If I cannot explain the business to my kids, then, I do not know the business well enough.  It will be less risky if we qualify the leads (or tips) provided so that we can improve our "odds", arriv...