Bye partisan - the death of the moderate. We are focused on the wrong election. Most votes have not yet been cast but indications are pointing towards a Democrat-led Senate and Republican-led House. So yet again, it looks like Washington is about to pull an Avengers by having a ton of characters each trying to overshadow one another without pushing forward much of a plot. Thanks Obama. Our problem is we throw the word “moderate” around like it’s a venomous putdown these days. Literally - I have heard the word moderate used in an argument against HilDog. Granted I live in Massachusetts where it’s basically illegal to believe in capitalism but God forbid we have a president that can bring resolutions, right? We’ve elected these people to represent us on complete opposite ends of the spectrum who refuse to work with one another. For investors, stocks move higher on certainty and lower on uncertainty so knowing not much will change for the coming 2-4 years should be good for the markets. However, for those such as myself hoping for an overhaul of broken systems such as healthcare and education, we’ve got a better chance the Cubs Indians will ever win the World Series.
Make Japan Date Again! As an American, this data is both fascinating and unsettling. Recent surveys show that over 40% of Japanese people aged between 18-34 have never had sex before and over 60% of unmarried individuals are not in a relationship. While I recognize that productivity is most likely higher when young folks don’t become pure hedonists once the clock hits 6 PM, too many young adults still having their v-cards has enormous economic implications. Simply put, demographics matter A LOT. What this data tell us is that Japan is both getting older and declining as a population. Why do we care as investors? This means less people in the workforce which leads to lower consumption, lower taxes to fuel government spend, and ultimately stagnated economic growth. Not the trends you want to see out of the 4th largest economy in the world. Please, if you have the time, I’d encourage you to call your friends across the Pacific and encourage them that it’s time to hop on the good foot and do the bad thing.
Elon Musk has shingles… For those who don’t understand the context of my superb pun, this will get you up to speed. Suddenly, Tesla’s ($TSLA) real business model is starting to emerge and it shows strong resemblance to what Nikola Tesla failed to achieve at the turn of the 20th century. Coupling Tesla’s Powerwall home battery and their solar glass roof tiles (amazingly cheaper than a traditional roof), Tesla can now provide low-cost electricity to millions of households across America. Need an analogy? Think of the home as a cactus. A cactus collects sunlight during the day and performs photosynthesis in the evening to reduce the amount of moisture that’s lost in the process (science folks, I hope I didn’t butcher that). With Tesla’s technology, their solar panels can both power the home and recharge the battery during the day with the battery helping power the home in the evening. The resulting reductions in the use of outside electricity have massive cost savings and allow us to go buythat hummer we’ve always wanted lower our reliance on fossil fuels.
… and I hope that Tesla catches it. Admittedly, I’ve been a major bear against Tesla despite admiring Tony Stark Elon Musk and technology due to what topically appears to be an egregiously overpriced $25+ billion current value and it’s “cocktail party stock” status (a stock you brag about owning at a cocktail party). Currently, Tesla’s business is heavily reliant on both tax subsidies given to the consumer for owning an electric vehicle and Tesla selling their “Zero Emissions Vehicle credits” to other automakers not meeting their electric vehicle quota (for more on this, read here). Now, Tesla’s Powerwall and shingles have me really hoping we can get some major pain in the stock because the new products should be home runs based on where I see the world heading. And the public (and markets) have been known to get a little jelly and ig’nant and turn on those that tend to be the greatest innovators –Nikola Tesla, mason jar extraordinaire Howard Hughes, and Steve Jobs to name a few. So now my watch begins as I wait patiently for a sub $80 TSLA. And the early signs of a paradigm shift are out there.
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