Welcome to The Alpha Report 👋

You only have to get rich once. Now is your time.

Major News Today:

• Max euphoria is near.

• Tesla stock pumps 60% in the last month. (crazy)

• 30 year fixed mortgage rate unchanged at 6.96%.

• 10 year treasury bond yield unchanged at 4.30%.

• Tesla continues to rally and risks are emerging.

Million Dollar Lesson:

Everyone is a genius in a bull market.

When the tide is up, everyone is having a good time.

When the tide goes out, you can see who had their pants down.

Risks To Tesla Rally

• Man this has been a wild pump for Tesla

• The question is, can the be sustained.

• The Answer, absolutely not.

• Does anyone know exactly when it will take a breather? No

• I will say this, I made about 200k in the market in the last month. Does it feel great to make a bunch of money? Of course. But understand that Tesla can not pump 5%+ per day and not pop.

• I am a big tesla bull. I have a multi 6 figure position in it. Am I buying more now at these levels? Nope.

• I am not saying it will crash or must crash, but I am saying you should only make plays when you have a solid margin of safety.

• Tesla trading at a 141 PE for 2024 earnings is lofty! NVDA is at 50 for reference.

  So what's the play on Tesla?

  If you can pass both of these tests, it’s ok to buy in my opinion.

1. You must hold the shares for a minimum of 5 years from right now.

2. You must be ok to stomach 60% swings in the share price.

   Short term, it will be bumpy, long term it can be astronomical.

   My 2030 price target is $1,200

Will The Market Crash?

• That is the million dollar question

• Nobody knows with certainty but I will say this, only make a play when you have a strong margin of safety.

• Do not let your friend tell you a stock to buy and YOLO into it. Do your own research and understand the play.

• Buying in cause it “keeps going up” is not a strategy. That is a recipe for disaster.

• I do feel we are lofty now and when valuations are lofty and some bad event happens, it’s a setup for markets to correct lower.

• Trump is viewed as pro business and pro stock market, but if he actually pulls through with tariffs and a potential trade war on china, that could be bad for the market.

• Just look at history. When trump did the last trade war, the market did correct lower and it was trading at a lower valuation.

• So my stance now? I am cautiously optimistic.

Potential New Trades:

• Google 1 yr+ play (buy calls/sell puts)

• Amazon long term play 3+ yrs (sell puts/buy shares)

• Nvidia on dip (Buy Shares)

• TLT 1yr calls (This is one of my favorite plays)

• TSLA buy puts (3 month duration) Ultra risky though

Current Valuations & Price Targets

• The S&P 500 (Ticker: VOO) at a PE ratio of about 22.5 right now, we are a little lofty. (But not crazy expensive) BUT, rates are expected to fall and I agree with the expectations. Rates are like gravity on the market. If rates fall, stocks become the only game worth playing, which will push up valuations.

• The Nasdaq 100 (Ticker: QQQ) at a PE of 31.4 is a little lofty also. So how do we value that? What do we price in? How much will Ai play into this growth? All things that nobody on earth knows 100% Me personally, I feel the earnings growth of the Nasdaq (QQQ) will be higher vs what the SP500 does. That is why QQQ is justified to get a higher PE ratio. Being its priced at a PE of 31.4, that is not crazy over valued in my opinion. Especially in an environment that is expecting lower interest rates. Most people do NOT put enough emphasis on how big of a deal rates are...

• Rates are gravity. We are currently at 4.75% fed funds rate now. We are expected to be at 4 in a year. 1% is a decent cut and that will make a difference.

2025 QQQ Price Prediction End of Year: $530

2025 VOO Price Prediction End of Year: $580

Tip of The Day:

The best investment you can make is in yourself. Continue to build your tool box of investment strategies and knowledge. The more you know, the more likely you will be able to find huge investment opportunities and have the confidence to put your money where your mouth is.

CONFIDENCE COMES FROM PREPARATION!

Current Value of My Trading Account:

• Went from a value of $825k a week ago, to over $902k today. NOT BAD!

Final Comments:

• The Tesla pump is irrational (don’t FOMO in unless you pass my test)

• Market is a little lofty but still opportunity if you look hard enough.

• Trump should be good for the market but trade war is a risk

• Continue to DCA into quality stocks/ETFs

• When you find undervalued companies, use options to magnify gains

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