Welcome to The Alpha Report 👋

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

Major News Today:

• Tesla Gets Smoked Again (my puts are printing cash)

• Prime example of newbies buying high and selling low.

• Disney reports solid numbers (buy or sell the stock)

• I break down the true value of Tesla stock.

• 30 year fixed mortgage up slightly to 7.08% from 7.07% yesterday.

• 10 year treasury bond yield down slightly to 4.44% from 4.45% yesterday.

Million Dollar Lesson:

Simple and sweet - buy low, sell high.

Do not let emotions cloud your judgment.

Only make plays when you have a margin of safety.

Disney Earnings Breakdown

• Beats top and bottom

• Currently trading at $111/share

• Q4 24 EPS: $1.14

• Q3 24 EPS: $1.39

• Q2 24 EPS: $1.21

• Q1 24 EPS: $1.22

• Total TTM EPS: $4.96

• 111/4.96 = 22 PE trailing. (a little high for assumed 12% annual growth)

• EPS same quarter last year was $0.82 vs $1.14 now. That is 39% YoY earnings growth

• Revenue same quarter last year was $21.24b vs $22.57b now. That is 6% YoY revenue growth

• The stock is up 22% in the last year. (which is good for buyers cause earnings went up more vs share price, implies undervalued on that single metric)

Key Takeaways From Disney:

• The stock is a little over valued based on my intrinsic value calculator with the assumptions I put in.

• If I increase the growth to around 15%, the stock is basically trading for intrinsic value. So it’s a decent buy assuming that.

• Link below to get my calculator for FREE!

Tesla Takes The Dip

Let’s break down what I currently think the stock is worth.

• Currently trading at $310/share

• Q3 24 EPS: $0.72

• Q2 24 EPS: $0.52

• Q1 24 EPS: $0.45

• Q4 23 EPS: $0.71

• Total TTM EPS: $2.40

• 111/2.40 = 129 PE trailing.

• EPS same quarter last year was $0.66 vs $0.72 now. That is 9% YoY earnings growth

• Revenue same quarter last year was $23.35b vs $25.18b now. That is 8% YoY revenue growth

• The stock is up 31% in the last year.

• Even assuming a 35% annual growth rate, the intrinsic value is $89 bucks... SUPER LOFTY

• This appears to be a LARGE mis pricing and this is why I bought puts.

• Not saying he HAS to go down, but it seems more likely to do so.

• Also keep in mind, I have OVER 700 shares of Tesla. So don’t think I am some big bear. I just think short term, it ran up too much…

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)

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

• 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 22.3 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 31.6 is a little lofty also.

• 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:

Always know what you are investing in and why.

Do not just buy into something cause it’s going up in price!

Current Value of My Trading Account:

• The market took a breather today.

• It is much needed and healthy!

• I think we are about 10% over valued, so this perfectly fine.

• 

Final Comments:

• The market took a dip today, which is needed.

• Tesla is snapping back to reality.

• Newbies that FOMOed the top in Tesla are now getting smoked.

• 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

👇Check Out My Links Below👇