Tesla is hot but could be too hot to handle. Mike Larson recommends safe investments that have outperformed over the last year.
As I sat down to write this piece on Tuesday, shares of red-hot, battery-powered car-maker Tesla (TSLA) were soaring more than $100 in the pre-market. That was good for a gain of around 13%.
The day before TSLA soared almost $130, or around 20%. Since its rocket ride began in October, Tesla has soared more than $630. That’s a stunning 3.5X move.
And you know what? I wouldn’t touch the stock with a 10-foot pole!
Wait … WHAT? How can that be? Have I lost my marbles?
Don’t I know that one bullish firm recently raised its price target on TSLA to $6,000 from an already-incredible $4,000? Didn’t I see that billionaire Tesla investor who came on television this week to say the company could ultimately rake in $1 trillion in revenue? That would be more than 40x the $24.6 billion in sales it generated in 2019.
All true. But also, irrelevant. Or at least it is to me as a senior analyst at Weiss Ratings and editor of our Safe Money Report.
Why? Because the kinds of investments I recommend need to provide a reasonable margin of safety! They need to have proven their worth over lengthy periods of time. They need to earn rock-solid Weiss Ratings.
They also need to produce respectable dividend yields that can generate solid income in this low-rate regime. And they have to operate in resilient sectors – sectors that are appropriate for the current stage in the economic and credit cycles.
Tesla fails on all accounts. Every single one!
Now, there are some investors who might say: So, what! You’re so boring. Why shouldn’t I just mortgage the house, move my kids’ college money out of a sleepy 529 plan, and put it all on TSLA? If it goes to $6,000, I’ll be rich!
And to them, I’d say “Okee dokie. Your call.” But I’ve spent almost a quarter century closely analyzing the markets. I’ve followed stocks and bonds through multiple, complete, boom-and-bust cycles. I saw how that kind of thinking blew people’s portfolios up in the dot-com mania. And I saw how it did it again in the housing mania.
So, I’d much rather stay focused on the kinds of investments with real, underlying, fundamental strength, soundness and resilience. And it’s not like that focus has cost you anything as an investor. That’s because Safe Money investments are leading this market, handily outperforming many other alternatives.
If you’re the kind of investor who sees the logic and wants to ignore the Tesla hype and focus on these gems instead, give my Safe Money Report a try. You won’t be disappointed.
Check out our website for more details and join me and dozens of other analysts, money managers and market experts at the Orlando MoneyShow from Feb. 6-8. I have several presentations and a luncheon scheduled and would love to meet and talk markets with you. You can check the grades on YOUR stocks at the Weiss Ratings website: www.weissratings.com or get specific names, and actionable “buy” and “sell” signals by subscribing here: Subscribe to Safe Money Report here…
