Elazar was launched in 2004 by Chaim Siegel and has served famous hedge fund clientele who demand a keen understanding of drivers of individual companies and financial markets. Chaim twice worked for renowned trader Steve Cohen of then-SAC Capital (now Point72). He was also a partner at JLF Asset Management which was funded by George Soros. Previously he was one of seven analysts on a $13B mutual fund at Morgan Stanley Asset Management. Elazar Advisors publishes its research into the Reuters/Refinitiv Institutional Platform and Factset where Elazar's earnings estimates are factored into the Street earnings numbers.  Elazar's research is used regularly by fundamental and algorithmic traders and investors at some of the largest mutual fund and hedge fund managers in the world. Chaim has been a 5-Star top ranked analyst in Tesla and other big cap tech companies. Try us with a  free trial here . All investments have many risks and can lose principal in the short and l

Tesla: "Don't Buy It If Volatility Is Scary"


Any idea who said that title? None other than Tesla's CEO Elon Musk himself on his recent earnings call.  He said a lot on that call. He called for a profit in Q3, he told off some analysts and he warned investors to watch out for volatility. We take it all seriously.

Q3, Q4 Profit? Oh My

Oh my that would be amazing. The stock would absolutely catapult.  Our earnings model doesn't see how they do it though. They've pretty much missed key targets for Model 3 along the way.  It would take a huge move up in gross margins and cuts in operating expenses to get there.

Instead we have big earnings downside versus the Street. We can't get there. Not yet.

Don't Need Cash

On this one we believe him.  Our earnings model actually shows they may be in the clear on cash needs. That's obviously a very bullish call.

But, "Don't Buy It If Volatility Is Scary."

I'm sorry but, yes, volatility is a scary thing. Markets tend to go down when volatility goes up. People are usually glued to the VIX as a contrary indicator to see where markets might go. Bull markets are smooth markets. Bear markets are volatile markets.

So if this was a comment for those that think volatility is a scary thing, that's pretty much everybody except maybe stuntmen and stuntwomen. Investors, public investors, tend to enjoy calm.

Maybe private investors can handle financial volatility but generally public companies stand for stability.

But Tesla is different in that way. It trades publicly but it's really a giant unicorn with a ton of interest, rightfully earned.

But investors should understand that this is not your typical public investment. The risk profile is much higher.

Conclusion

We plan to review to better understand how they can reach profitability. We'll be back.






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Reading Comprehension
On the recent Tesla earnings call Elon Musk:
A) chewed out a bunch of institutional analysts.
B) said the next Gigafactory is planned to open on Mars in 2019.
C) told investors don't worry his plans are a 100% lock.
D) took questions from Donald Trump through YouTube and Twitter.

Please answer in comments.


All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless. Model portfolio trades and positions are hypothetical to be used for directional analysis and ratings purposes. Elazar and its employees do not take individual stock positions to avoid front running and other potential customer related issues.

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