Posted on

Unstoppable Tesla

As just one illustration of what’s taking place in this market, Tesla stock gained over $115 billion today (yes, billion with a “B”) on the news that Hertz has placed an order for 100,000 vehicles over the next 14 months totaling about $4 billion in revenue. That’s almost 30x the one-time sale! Not earnings but SALES!

Put another way, Tesla added two entire Ford Motor Company’s in a single day (based on $60+ billion market cap)! Ford sells over 4 million vehicles worldwide each year and, yet, Tesla stock increased by two Ford Motor Company’s (equivalent to 8 million cars annually) in a single day on the news of a 100,000 one-time fleet sale over 14 months.

Christopher Bloomstran points out, “As of today, $TSLA is valued above the entire global auto industry, PLUS Uber, Lyft, Progressive, GEICO (if public), Allstate, Duke Energy & Dominion Energy.”

To put that in perspective, understand that there are about 74 – 78 million cars sold globally and Tesla sells about 1 million of those yet Tesla is valued more than the rest of the entire global auto industry combined. Continue reading “Unstoppable Tesla”

Posted on

Quiz – Knowledge Check

I’m posing this question as a fun little exercise to check investors’ basic understanding of risk / return dynamics.

What’s a “better” portfolio (assuming buy-and-hold) based on the return streams below, and why?

A. Portfolio A
B. Portfolio B
C. Neither: They’re equivalent

Image

Posted on

$27 Trillion National Debt and Counting, How It Gets Paid and Who Pays It

The debt of the US government recently crossed $27 trillion. Additionally, there are talks for another $2 trillion of stimulus (which the stock market is loving by the way). So, if passed, that would put the US national debt at around $29 trillion!

We should note that the US National Debt was about $20 trillion at this time in 2016. So, the debt was doubled to $20 trillion from $10 trillion (2008-2016) during President Obama’s two terms and looks to be on pace to double again over the subsequent two terms based on the increase thus far in President Trump’s first term.

A $29 trillion debt represents almost $90,000 per US citizen. That means a household with four people has about $360,000 as their share of the national debt in addition to their own private debt and their state and local government debt. Consider that total US household debt is about $14 trillion so that’s another $42,000 per citizen, or $170,000 for that same household of four on average.

Let’s consider what this really means. Continue reading “$27 Trillion National Debt and Counting, How It Gets Paid and Who Pays It”

Posted on

Benefits of Working Longer

This morning I came across an interesting study produced by researchers from The Wharton School, “Working Longer Solves (Almost) Everything: The Correlation Between Employment, Social Engagement and Longevity.”

I’ve always believed that folks who retire should continue to do something productive well into retirement.

Based on my own experiences with retiring clients and family over the years, I’ve long believed continuing some sort of meaningful work into retirement would have a positive impact on retirees’ physical and mental health and longevity. Well, this study confirms that and more!

The study found that working longer produces three primary benefits for older adults:

  1. Financial security
  2. Physical health
  3. Mental health

Continue reading “Benefits of Working Longer”