NFL just three this week
Tenn- KC over 58
Carolina -3
Miami +2.5
16-8 on the season
Read in Browser
TOGETHER WITH
Tenn- KC over 58
Carolina -3
Miami +2.5
16-8 on the season
Read in Browser
TOGETHER WITH
Welcome to the Sunday edition of Wall Street Breakfast, which previews events for investors to watch during the upcoming week. If you want to receive this a day earlier, follow Stocks to Watch and select the option to receive email notifications.
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1-2 NFL booo
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Global Market Comments
October 26, 2021
Fiat Lux
Featured Trade:
(CHINA’S COMING DEMOGRAPHIC NIGHTMARE)
China's Coming Demographic Nightmare
Now that China has ended its “One Child” policy, it is time to assess its long-term costs.
Adopted 33 years ago, there are now 32 million more boys under the age of 20 than girls.
Large scale interference with the natural male:female ratio has been tracked with some fascination by demographers for years and is constantly generating unintended consequences.
Until early in the last century, starving rural mothers abandoned unwanted female newborns in the hills to be taken away by “spirits.”
Today, pregnant women resort to the modern-day equivalent by getting ultrasounds and undergoing abortions when they learn they are carrying girls.
Millions of children are “little emperors,” spoiled male-only children who have been raised to expect the world to revolve around them.
The resulting shortage of women has led to an epidemic of “bride kidnapping” in surrounding countries. Stealing of male children is widespread in Vietnam, Cambodia, Laos, and Mongolia.
The end result has been a barbell-shaped demographic curve unlike that seen in any other country. The Beijing government says the program has succeeded in bringing the fertility rate from 3.0 down to 1.8, well below the 2.1 replacement rate.
As a result, the Middle Kingdom's population today is only 1.2 billion instead of the 1.6 billion it would have been.
Political scientists have long speculated that an excess of young men would lead to more bellicose foreign policies by the Middle Kingdom. But so far the choice has been for commerce, to the detriment of America's trade balance and Internet security.
In practice, the one child policy has only been applied to those who live in cities or have government jobs. That is about two-thirds of the population.
On my last trip to China, I spent a weekend walking around Shenzhen city parks. The locals doted over their single children, while visitors from the countryside played games with their three, four, or five children. The contrast couldn’t have been more bizarre.
Economists now wonder if the practice will also understate China's long-term growth rate. Parents with boys tend to be bigger savers, so they can help sons with the initial big-ticket items in life, like an education, homes, and even cars.
The end game for this policy has to be the Japan disease; a huge population of senior citizens with insufficient numbers of young workers to support them. The markets won't ignore this.
In the latest round of reforms announced by the Chinese government was the demise of the one child policy. But no matter how hard you try, you can’t change the number of people born 30 years ago.
The boomerang effects of this policy could last for centuries.
Quote of the Day
"Brains are the new tonsils. Thanks to the Internet, you don't have to know anything anymore," said comedian Paul Riser.
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Global Market Comments
October 27, 2021
Fiat Lux
Featured Trade:
(A NEW THEORY OF TESLA, or WHY I’M RAISING MY TARGET TO $10,000),
(TSLA)
A New Theory of Tesla, or Why I’m Raising My Target to $10,000
I’ve been battling shorts in Tesla for a decade….and you won.
Look at the price of Tesla shares today and I have to laugh. For the $3.30 bid/offered spread today amounts to the entire price I paid for the shares after its IPO bombed in 2010. Back then, even Elon Musk gave the company only a 10% chance of surviving.
My first Tesla, chassis no 125, was scrapped for parts a long time ago, thanks to a drunk driver in a GM Silverado on Christmas Eve. A lot of people talk about Tesla, but few have completely taken them apart, as I have….twice.
Yes, it’s still true that if you buy the stock you get the car for free, possibly a fleet of them.
I set my target at $1,000 a decade ago, which we just topped by $60. My assumption was that the company would take over a large part of the global car market, about 90 million vehicles a year, and 17 million in the US alone. Tesla’s own plans have it manufacturing about 20 million units in 2030.
Add in an eye-popping $8,000 upgrade for the fully autonomous street to street driving, and Tesla should be making tons of money by then.
That looks on track to happen and is already reflected in the current share price.
But what if there is more to Tesla? A lot more?
In fact, after making the rounds in Silicon Valley, it’s clear that there is a lot more than meets the eye. Tesla will become the largest publicly listed company in the world and account for an important share of US GDP.
It might even become the world’s first $10 trillion company.
Yes, it will even grow larger than Saudi Aramco, which manages the kingdom’s oil riches. The irony is rich.
Let’s say that it reaches its ambitious 2030 goal of 20 million units? What else is there?
For a start, when Tesla goes solid-state, battery efficiencies will increase 20-fold, costs will drop by 95%, and vehicle ranges will double. This could happen in eight years, or as soon as two. They already have the solid-state batteries. All they need now is to understand economical mass production.
The company has already said it is dropping the price of its cars to $25,000 in three years, but much more is possible.
Converting the car bodies from aluminum to carbon fiber, which the wheel wells are made of now, will further cut costs, increase ranges, and improve safety. Carbon fiber is five times stronger than steel at one-tenth the weight.
To reach that goal, the total Tesla fleet will have grown from 1.5 million units today to 75 million by 2030 and account for one-third of all the cars on the road. Those cars are going to need one heck of a lot of electricity to run.
Step in Tesla.
The company already has 20,000 superchargers in the US. No place in the country is more than 100 miles away from a supercharger.
A Tesla Model 3 with a 100W battery pack driving 20,000 miles a year costs $720 to power at current prices. The entire fleet would cost $54 billion a year to run at a national average price of 12 cents/kWh.
Ring the cash register for Tesla….again.
Let’s say that rather than paying for electricity at an external charger at some distant shopping mall, you’d rather get the power at home for free.
Enter Tesla.
Finally, after a decade of waiting, Solar City, a Tesla subsidiary, is manufacturing cost-competitive solar roof tiles, or photovoltaic tiles. With a ten-year head start in silicon and battery technology, there is no reason why Tesla shouldn’t dominate in this industry as it already has with cars.
To keep the calculations simple, if 75 million homeowners buy solar roofs at an average of $36,000 each, the gross sales would reach $2.7 trillion. Ka-ching! To get a quote for your new solar roof, please click here.
To get the most out of your solar roof, you really need to buy a couple of 13.5KW Tesla Powerwall storage batteries, which would cost $25,000 installed. That way, the solar tiles will charge the batteries during the day, which will then power your house at night. You will become grid-independent forever, as I have been for years.
Where do Powerwall’s come from? Not the stork. They are recycled batteries from old Tesla cars.
That will protect you from soaring electric power costs driven by coming cascading bankruptcies of public utilities around the country, all caused by global warming. You also have your own power supply for the ten days a year the grid is down from wildfires on the west coast, or hurricanes on the east coast.
When the neighborhood lights go out, I charge my neighbors a bottle of wine for a cell phone charge. It’s not a bad racket, but I’m getting more than I can drink. In fact, I am producing enough excess electricity to power my entire neighborhood, about 20 houses.
Under current law, the federal government will pay for 26% of your cost with alternative energy tax credits. With a new environmentally-oriented president, my bet is that this goes up a lot in the next tax bill.
Naturally, you are going to want highspeed WIFI so all of the elements of your integrated solar solution can talk to each other and upgrade whenever they want. So, you’re going to need a Tesla Starlink satellite connection. The system now in beta testing will eventually deliver a 500 megabyte a second WIFI connection anywhere in the world.
The global WIFI market is expected to grow to $7.2 trillion by 2022 (click here for the data). Give half of that to Tesla and you get another $3.6 trillion in sales. Oh, and if you want to sign up as a beta tester for Starlink, please click here.
Did I mention that Musk also owns a rocket company, Space X, which can launch satellites into space at one-tenth the cost of all competitors? Elon’s goal is to cut costs by 100-fold.
Looking at Elon’s big picture as an engineer and a scientist, I am amazed to find so many 10X and 100X improvements going on all at the same time!
Add all this together and you might get a market capitalization for Tesla of $10 trillion. Elon Musk would become worth $2.4 trillion. Then he really can afford that trip to Mars.
This prompts me to raise my target for Tesla shares to $10,000.
That’s not a particularly bold prediction. It’s only 9X the current share price, compared to the 333X gain seen since the IPO.
Hey, I got the last 333X right, what’s another 19X?
Nobody ever accused me of thinking small.
And if Tesla really does become a $10 trillion company, you’d be right to raise antitrust concerns. But as anyone who has done the math on breaking up these big companies can tell you; such a move would double their value. Tesla at $20,000 a share, anyone?
And as incredible as it may seem, Elon Musk outlined all of his grand global vision to me personally in great detail when I first met him in 1999 pitching me for an investment in X.com, which later became PayPal (PYPL).
Then the bright-eyed, fresh-faced overconfident kid was only 27 and worth a mere $10 million. But he had a nice car, a million dollar 618 hp McLaren F-1 with a V-12 engine.
A pittance really.
I passed, which is why I am still working today.
No kidding.
Tesla’s Solid State Batter Design
What its Modeled After
Chassis No. 125….R.I.P.
My Latest Set of Wheels
Like-Minded Found in Chicago
At the Pebble Beach Car Show
Going All-Electric
13.5 kWh Powerwall, Enough Juice to Run My House for a Day
This Lot of 300 Cars in Fremont Gets Filled and Emptied Out Three Times a Day
Back in 2010, the First Tesla They Had Ever Seen
Quote of the Day
“Making cars is hell”, said Tesla founder Elon Musk.
Global Market Comments
October 29, 2021
Fiat Lux
Featured Trade:
(WHICH IS THE CHEAPEST US STATE?)
Which is the Cheapest US State?
Everyone knows that California is the most expensive state in which to live in the country. During the pandemic, you could do something about it, thanks to Zoom (ZM), which allows you to work from any place, anytime.
That has given rise to one of the newest concepts in the jobs and real estate market known as “Interstate Arbitrage.”
It’s really very simple. Get an online job in an expensive state where you can work online but live in a bargain basement state. Your savings will explode beyond all imagination.
This is especially important to Millennials early on the savings curve who look at real estate prices on the coasts and blanche. A cozy two-bedroom in San Francisco’s posh Pacific Heights? How about $5,000 a month for rent alone!
Of course, we all know the highest paying states; California, New York, and Washington. These all have punitive state taxes on top of high-end federal taxes, like California’s 13% rate, with millionaire surcharges on top of this. Add it all up and state and federal taxes come to a backbreaking 52% a year.
On the other hand, some nine US states have no tax at all, including Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
Mississippi has the cheapest housing in the US at 55% the cost of California housing, followed by Alabama, Arkansas, and West Virginia at 60%.
The best place to fix stuff is in Alabama, Mississippi, and Tennessee, where it is 16.6% cheaper than California. Nevada is 10.5% cheaper to buy goods. The discount is less here thanks to the proliferation of large national retail chains.
Add it all up and the cheapest state to live in is Arkansas at a 27.7% discount to CA, followed by Alabama t 26.3% and West Virginia at 25.2%.
Companies have gotten wise to “Interstate Arbitrage” and are demanding part of the action in the form of big pay cuts for distant employees. They love the cut in overhead expenses and didn’t like those nerds in their offices so much anyway.
Employees are fighting back by not actually disclosing that they put down stakes in New Hampshire, Wyoming, or Nevada. Warning: Your iPhone can bust you at any time, recording your exact location 24/7.
It’s becoming a big issue as up to 30% of stay-at-home workers are never expected to come back to the office. It partly explains why shares of these mostly tech companies have been on such a meteoric tear for the past nine months.
If you like Interstate Arbitrage, you will absolutely love international career arbitrage. You can live like a prince in Budapest for $1,000 a month, and like a king in Monte Negro for $750, or Malaysia for $500.
Riga in Latvia has become a major European tech hub and even offers a technology visa for transplanted Americans. And their broadband is better than found in most US states.
I guess you can get used to eating grits, rooting for the Razorbacks, and enjoying the Apple blossom, the state flower of Arkansas. Chances are that the equity in your California home alone will allow you to purchase a much larger home in “The Natural State” for all cash.
I have to tread lightly here because I already have many subscribers in Arkansas, the birthplace of Bill Clinton.
But you get what you pay for. It’s a good rule of thumb that the less you pay in state taxes, the worse the education system. If your kids have already grown up, it’s not an issue, as long as you don’t mind talking to stupid people every day.
Of course, those who live in the Golden State say it is worth the price, with its balmy climate, diversity of recreation opportunists, fabulous beaches, majestic mountains, and incredible rate of innovation.
It’s much better to pay high taxes on a $10 million annual income, entirely possible at a big tech company, than low taxes on a $50,000 job.
As for me, I think I’ll work a little harder and keep those incredible Pacific sunsets and fantastic Dungeness crabs, sourdough bread, and Anchor Steam Beer.
To find where your state ranks on a number of parameters, please visit the interactive map by clicking here.
It’s California for Me
Quote of the Day
"In the world of business, bad news often surfaces serially. You see a cockroach in your kitchen; as the days go by, you meet his relatives," said Oracle of Omaha, Warren Buffett.
Hoping they make a change since it appears many needed...is there any other way I could view? Always informative...the most recent one on Tesla almost has me hugely ready to jump back on TSLA stock...had, profited, sold out and wishing maybe a bit premature but profits are profits...beginning to think even at these prices, it's a discount compared to what it will become...which is that stock like AMZN, APPL types that 10-20 yrs from now your saying GENIUS for getting early on.
Thanks again for posting what and when you can
Thanks again for posting what and when you can
I will refer this concern to the management Bozzie and let's see if we can add this 10,000 limit.
a very good friend took a package from Air Canada when covid hit, he was senior management. A year and 1/2 later he's helping to build the Canadian arm of a US airline based in Miami.
CJET
they went live on NEO 2 weeks ago. or so . Have no idea how this will turn out, their goal is to make it Canada's rock bottom cheapest fares, they feel there's a niche. I dont own shares, just sharing. Pretty sure opened at .40c. Management is very experienced. I will put limit buy order at .45c , if filled, let it go for a few years
he did say ;
'forward booking for all airlines r through the roof' . He likes Air Canada to hit $50 again, yikes
i did sell Oct JETS put @ $21.50, expired worthless, and have re-sold the Dec @ $21 . Have no problem if assigned, i'd be shocked if it lost the $21 support level, bloody army there awaits, BUT a loss of that level and a drop to $18 likely , ugh.
anyway, Boz, no our older boy came back from California, then a month later off to USA again with his Tic Tok clan. Used a bunch of that $100k to finance a 13 week, 13 game NCAAF trip, each Sat at a different game. Have no idea wtf they r doing, lol, i guess advertising and more tik tok shit . He knows nothing about college football, he grew up in hockey. Anyway the first game was at Ohio St, last game will be in the state of Florida . He's in Georgia now, they badly wanted the Braves to win yesterday as the state was ready to party-didnt happen. He's at the Georgia game this weekend, was at Clemson last week , and previously at the Alabama game Vs Tenn. Interestingly, by his account the collection of nicest people ? Alabama . Says the South is very nice . They hop from Airbnb to airbnb.....here's hoping he starts putting his engineering degree to use, lol
CJET
they went live on NEO 2 weeks ago. or so . Have no idea how this will turn out, their goal is to make it Canada's rock bottom cheapest fares, they feel there's a niche. I dont own shares, just sharing. Pretty sure opened at .40c. Management is very experienced. I will put limit buy order at .45c , if filled, let it go for a few years
he did say ;
'forward booking for all airlines r through the roof' . He likes Air Canada to hit $50 again, yikes
i did sell Oct JETS put @ $21.50, expired worthless, and have re-sold the Dec @ $21 . Have no problem if assigned, i'd be shocked if it lost the $21 support level, bloody army there awaits, BUT a loss of that level and a drop to $18 likely , ugh.
anyway, Boz, no our older boy came back from California, then a month later off to USA again with his Tic Tok clan. Used a bunch of that $100k to finance a 13 week, 13 game NCAAF trip, each Sat at a different game. Have no idea wtf they r doing, lol, i guess advertising and more tik tok shit . He knows nothing about college football, he grew up in hockey. Anyway the first game was at Ohio St, last game will be in the state of Florida . He's in Georgia now, they badly wanted the Braves to win yesterday as the state was ready to party-didnt happen. He's at the Georgia game this weekend, was at Clemson last week , and previously at the Alabama game Vs Tenn. Interestingly, by his account the collection of nicest people ? Alabama . Says the South is very nice . They hop from Airbnb to airbnb.....here's hoping he starts putting his engineering degree to use, lol
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Nice! amazing...Your kids think outside of the box....They sound like great guys and what party trip... gotta think they met a few nice coeds..Can I say I'm jealous ?
Love Alaska Air still....Your tips are always welcome!
Tried the MH this AM..too big even with me chopping it up a bit....I'll keep trying occasionally
Hope everyone has a good week
Love Alaska Air still....Your tips are always welcome!
Tried the MH this AM..too big even with me chopping it up a bit....I'll keep trying occasionally
Hope everyone has a good week
