Are Apple and Tesla a match made in heaven?

Are Apple and Tesla a match made in heaven?

Over the last few days there has been much speculation regarding the future of Tesla with the shares now below $300. There was also been mention of a potential offer from Apple, no indication whatsoever from the company, amid a growing view that Apple and Tesla could well be a match made in heaven. So, why is there so much attention on Apple and Tesla?

Elon Musk

Love him or hate, Elon Musk is a man who gets things done goes against the establishment and is not scared to go out on a limb. While his techniques and his strategy are often called into question, references recent battle with the SEC, he does sail close to the wind but very rarely does his boat capsize. As a consequence, there is some comment from analysts suggesting that Elon Musk would have made a far better replacement for Steve Jobs at Apple. Does this make sense? Continue reading “Are Apple and Tesla a match made in heaven?”

What can Tesla do to appease the markets?

What can Tesla do to appease the markets?

Tesla shares have fallen from well over $400 to below $300 over the last few months. It is fair to say that this has been an extremely rocky ride for the electric car manufacturer. The founder Elon Musk has been relegated to behind-the-scenes (although he is often wheeled out to announce bad news) after his controversial social media communications. However, Tesla has significantly reduced costs going forward, which is exactly what the market wanted, but the shares are being hammered.

Short-term pain, long-term gain

In the back of the minds of many investors is the concern that Tesla will need to tap the market for additional funding in the short to medium term. Despite the company suggesting just a few weeks ago that it had turned the corner and would be profitable on a quarter by quarter basis going forward, this comment has been diluted a little. The company has reduced the workforce, announced plans to close many showrooms and will be reducing the price of the Model 3 to $35,000. So, why are investors still concerned about the company’s future? Continue reading “What can Tesla do to appease the markets?”

Donald comes up trumps in Chinese trade talks

Donald comes up trumps in Chinese trade talks

Love him or hate him, there is no doubt that Donald Trump has a knack of delivering what many people believed was undeliverable. While he stands on the verge of a historic summit with North Korea, which could denuclearise the Korean peninsula, there has also been great progress in Chinese trade talks. In his now all-too-familiar social media communication style, Donald Trump has been posting extremely positive notes from ongoing trade negotiations. So, what is going on behind-the-scenes?

Trade tariffs

At 12:01 AM on Saturday, 23 February 2019 plans to ramp up tariffs on Chinese goods worth $200 billion were cancelled. The threat of increasing tariffs from 10% to 25% was taken off the table amid rumours of a breakthrough in Chinese/US trade talks. This is a perfect example of how behind closed doors politics can be very different to the mudslinging condescending headline grabbing comments in the public arena. Continue reading “Donald comes up trumps in Chinese trade talks”

Elon Musk expands on Tesla’s self-driving software

What can Tesla do to appease the markets?

It seems that the new management approach at Tesla does indeed offer Elon Musk a window of opportunity to talk in public. In light of the recent management changes it was thought that the entrepreneur behind the electric car giant had effectively been sidelined and his ability to talk in public removed. However, a recent podcast with one of Tesla’s larger investors, ARK Invest, cast a very interesting light on the company’s quest for the perfect self-driving vehicle.

Software available by the end of 2019

Tesla CEO Elon Musk confirmed that he fully expects the company to have the latest technology in place to operate vehicles without drivers by the end of 2019. There is a question mark over regulatory approval – in light of some of the high-profile incidents the early Tesla software was involved in. Even though the software has received a mixed reception amongst the public and automobile industry, great progress has been made of late. Continue reading “Elon Musk expands on Tesla’s self-driving software”

Amazon cancels plans for New York City headquarters

Amazon cancels plans for New York City headquarters

Despite the fact that poll after poll confirmed that New York City residents supported Amazon’s decision to open an office in the city, politicians seem to have scuppered the plans. The original idea was to open a campus in the Long Island City neighbourhood of Queens bringing around 25,000 jobs to the region. Rumours began to circulate last week that Amazon was looking to cancel the project and they have been confirmed today.

Unwilling to work with Amazon

It would appear that a small group of politicians in the New York City region were unwilling to work with Amazon to create 25,000 jobs. This is a company which continues to grab market share, has shown tremendous long-term growth and is here to stay. Quite why the movers and shakers in New York City were against the move is a mystery. Continue reading “Amazon cancels plans for New York City headquarters”

Has Amazon gone ex-growth?

Amazon cancels plans for New York City headquarters

If you were to look at share prices in isolation you would assume that Amazon had fallen through the floor and profits were down. The fact is that the recent profit announcement showed significant growth but concerns for the immediate future. This has spooked many analysts who took out their red pens to Amazon price targets after the shares fell. However, is it fair to say that Amazon has gone ex-growth? Continue reading “Has Amazon gone ex-growth?”

Is the market resigned to impeachment for Donald Trump?

Is the market resigned to impeachment for Donald Trump?

Who would’ve thought the mere prospect of a US president being impeached would not even register on the radar of many investors. It would appear this is the kind of situation we are in with US investors seemingly discounting the likely impeachment/resignation of Donald Trump in the short to medium term. If you read the press this comments are receiving less and less coverage and even his controversial statements are being ignored.

Is it time for change?

Love him or loathe him, there is no doubt that Donald Trump would at least appear to have the best interests of the US business sector at heart. Whether he goes about this in the correct manner is debatable but he is offering a greater degree of protection to US businesses than that seen in recent times. For many investors it is the ongoing friction and concern about a long-term trading relationship with China which is most troubling. While much of the public persona of Donald Trump is very different to that seen when negotiating behind closed doors, he does not give a very good impression to US and overseas investors. Continue reading “Is the market resigned to impeachment for Donald Trump?”

The risks of buying high premium stocks

The risks of buying high premium stocks

We only need to look at the likes of Apple to see how the mighty have fallen. The shares fell from around $230 to a low of just over $140 and now stand at $157. This has literally wiped hundreds of billions of dollars off the value of Apple. It also perfectly reflects the dangers of buying stocks which are afforded significant premiums by investors.

The benefits of high premium stocks

If the market is rated on a forward price-earnings ratio of 12 (for example) you may see some stocks valued on a price-earnings ratio of 18 or even 20. These are stocks which are positioned for significant growth in the short, medium and longer term. This degree of “certainty” means that many investors will buy into the story pushing the price higher and higher. One of the main benefits is the fact that the company can use “paper” i.e. its own shares, to acquire other businesses. Continue reading “The risks of buying high premium stocks”

Marijuana grower Canopy Growth benefiting from regulatory changes

Marijuana stocks benefiting from regulatory changes

While Donald Trump’s certainly has his critics, new US farm laws which provide financial assistance for industrial hemp growers are causing a stir on the stock market. For those not aware, hemp is a form of cannabis plant which is used to produce cannabidiol (CBD). Even though this chemical was discovered back in the 1940s it is only just being legalised for public use. While cannabis is strongly associated with relaxation and its various hallucinogenic elements, CBD is a variation which will not induce a high.

So, what does this mean for marijuana stocks and those producing CBD on a commercial scale?

Canopy Growth sees shares surge

Canadian cannabis producer Canopy Growth has seen a significant rise in its shares after being granted a hemp licence by the New York State. The company has already announced plans to invest up to $150 million in its New York operations. The group believes this is a major shift in US politics prompting a significant rise in marijuana stocks across the board. Continue reading “Marijuana grower Canopy Growth benefiting from regulatory changes”

Authorities finally come together with positive comments

Authorities finally come together with positive comments

The last few weeks has seen a growing chasm developing between the US government, the Fed and to a certain extent Donald Trump. Each of these bodies, despite the fact the US government is led by Donald Trump, seems to have had its own agenda which has caused panic and concern in markets. However, today we saw relief with better-than-expected jobs data, a surprisingly upbeat review from the White House and a more patient approach to interest rate rises from the Fed.

No recession in sight

Leading White House economist Larry Kudlow, while acknowledging recent gloomy forecasts, suggested that fears of a recession were exaggerated. His exact words were:-

“There’s no recession in sight. I know this has been a gloomy period and I know people are concerned about the stock market.” Continue reading “Authorities finally come together with positive comments”