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Major News Today:

• Tesla Takes A Nose Dive (as expected)

• The Fatal Emotional Flaw.

• CPI Inflation data on deck for tomorrow (Wednesday)

• 30 year fixed mortgage rate climbs to 7.08% from 6.96% yesterday.

• 10 year treasury bond yield climbs to 4.42% from 4.30% yesterday.

Million Dollar Lesson:

When quality stocks dip, how come people panic sell when it’s on sale?

When stocks pump, why do people wanna YOLO in and buy more expensive?

I am not giving you the answer. I want you to ask yourself that.

I will give you my answer in tomorrow’s report.

Newbie Fatal Mistake(TESLA)

• I can't tell you how many people were messaging me the last few days wanting to FOMO into Tesla.

• Literally, I got soooo many people all emotional not wanting to miss out trying to get me to justify them buying at these levels.

• So that was up until yesterday. (when Tesla was mooning)

• Wanna know what blows my mind? NOBODY sent me a DM today saying “should I buy into Tesla”

• You would think that the stock being down 6%+ today would excite ppl more to buy in at a “better price”

• NOBODY sent me a dm lol.

• This is EXACTLY why most ppl get smoked in the market.

• They FOMO in and buy the “potential tops” then when the stocks dips like it did today, they panic and sell at a loss.

• The complete opposite of what should be done!

• Did anything fundamentally change with Tesla today that justifies a 6%+ dip? NO

• So why is the stock down? Well, it is simple profit taking on a stock that is overvalued in the short term in my opinion.

• 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

   REMEMBER, THE NAME OF THE GAME IS TO BUY LOW AND SELL HIGH!

Inflation Data On Deck

• We get CPI tomorrow (Wednesday 11/13/24 at 530am PST)

• October Headline CPI expected to rise by 0.2% MoM, which is the same as last month.

• YoY Headline CPI expected to increase to 2.6%, up from 2.4%.

• Jerome Powell at the fed said a few days ago that the economy is solid and 2025 is expected to be solid too.

• On top of that, CPI is expected to tick up a little.

• Strong economy + some inflation remaining = Rates will be higher for longer.

• Interest rates are like gravity on the stock market.

• If rates fall, the market can pump cause there is no other game in town.

• If rates stay higher, the stock market has to compete with bonds/CDs which will push down stock market valuations.

• Below is the schedule for the rest of the CPI releases (inflation data)

  

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:

Do not let your emotions get the best of you.

Keep a cool mind in both bull markets and bear markets.

Most newbies FOMO into overvalued stocks & they panic sell when they fall in price and become cheaper.

Do not be one of the typical investors that buy high and sell low.

Current Value of My Trading Account:

• The market FINALLY took a much needed breather!

• Dips are healthy and are 100% normal.

• This is welcomed.

  

Final Comments:

• Tesla took a much needed breather (the puts I bought on Tesla are PRINTING CASH)

• Inflation data is key tomorrow. (has big implications for market valuations)

• Keep your emotions in check on pumps and dumps.

• Continue to DCA into quality stocks/ETFs

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

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