Tesla stock enters the stratosphere-leaving investors clueless on it’s next move

Tesla’s (NASDAQ:TSLA) start to 2020 has been nothing short of a spectacle. It was only in June 2019 that Tesla’s stock was hovering under $200 with speculation the company was struggling financially. Fast track 7 months and the stock is currently priced at $650.57 USD, quite a remarkable rally that still hasn’t given in underneath itself. The best part is that it is currently happening while the Coronavirus and the US-Iran tension have been suffocating social media and the news. There is genuine confidence in Tesla, as they drive greater production and enter more nations across the globe.

Tesla proving market realists wrong time and time again

I could not count how many times I had seen on social media groups or on finance articles how Tesla was going to come crashing down hard at $250. Once they pushed $250, $350 was very unlikely yet Tesla broke $350 in the next 2 weeks. The most interesting outlier I found while studying Tesla, was that there was a almost-constant positive buy-sell rate. So as someone sold at $400, someone else would buy these shares and ride them to $550. You could look at the stock behaviour as riding a wave. Now, it sounds a lot like a bubble, however in my opinion it was the market catching up with Tesla’s potential. Many people believe Tesla could possibly be the next Amazon (pushing $2000 stock price) in the next 10 years. This is an opportunistic view and I find it hard to see the stock push $1,500 in the space of a few years. In my opinion, 10 years or longer seems more reasonable as many things can still go wrong

Is it stable?

The past two days of trading have staggered at $650, which could mean that the stock will stabilise at $650 or a market correction may push it down to $600 or slightly below. I think most brokers are having a hard time processing which way Tesla will go next, but there is a general consensus that $650 isn’t the highest price the stock could reach. In my opinion, entering Tesla especially holds very strong unsystematic risk. Here’s a theoretical example: Let’s say the coronavirus spreads across China and effects Shanghai. This means Tesla’s powerhouse factory would be closed until the virus passes. This information would affect the stock price, as well as most of the companies that use China as a main source of manufacturing. You must be aware of these theoretical scenarios before entering a volatile stock such as Tesla.

YIG Evaluation

Before I start I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

After the earnings report posting some very intriguing numbers, in my opinion this stock could have some very nice potential especially on a longer timeline. It seems to me that everything is falling into place, and the last piece of the puzzle was substantial earnings and expanding operations. My prediction was that the earnings report would have a bullish effect on the Tesla stock price at around $540. However, I did not expect the market to open at $650 as many investors may see the upside potential of holding over the long run. Something to watch!

If you enjoy our articles or are wanting to learn more, you can subscribe to us for free via email and get updates when we post new articles. From all of us at YIG, thank you for the support.

Here is our free, uncomplicated, and extensive ASX portfolio

https://youth-investment-group.com/portfolio/

The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

Written by Tyger Fitzpatrick, founder of YIG.

 

An $800 investment in Amazon at IPO would now be worth over $1,000,000

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

Amazon is currently priced at $1,861.64 (AMZN), a 120,000% price increase since it’s IPO in 1997. Amazon’s come up is nothing short of remarkable, with the distribution giant reaching $1 Trillion in market cap. The common response to my last article regarding how investing $40k in Tesla would have made you a millionaire, was that $40k was a very unrealistic investment in a company that has come close to bankruptcy many times. Taking that into consideration, I have found a company that would have only required $800 initial investment to turnover millions. 

The brilliance of this is that Amazon’s initial IPO price was $18, meaning that $800 would have only bought you 44 shares initially. However, in the following year’s Amazon went under 3 splits- meaning they wanted to issue more shares and therefore would give holding investors more shares devaluing the share price. The 3 splits lead to a multiplier of 12, meaning after the splits you would know have 528 shares in Amazon. Now, in 2000 the value of your shares was worth around $40,000. Not bad right? At this point many people would have sold at least a portion of their shares as the share price was not likely to climb any higher. Here’s were it becomes a little unrealistic, as human’s we tend to act on emotion and therefore anyone that has made a cool 39k would tend to sell their shares – as we all know things come crashing down at some point.

If you held these shares through the troughs, even to the point where the stock staggered at $65 for many years,  you would now be holding over $1,000,000 in Amazon stock. Amazon in 1997, however was not the most favoured stock and it’s volume didn’t start ascending arguably till 2015 – almost 18 years later.

The moral of the story is that a calculated investment in a company with revolutionary ideas can pay off. Even an entry into Amazon before 2017 would have made you a very nice return. These companies are one offs – however revolutionary ideas should not go un noticed.

Here is our free, uncomplicated, and extensive ASX portfolio

https://youth-investment-group.com/portfolio/

If you enjoy our articles or are wanting to learn more, you can subscribe to us for free via email and get updates when we post new articles. From all of us at YIG, thank you for the support. 

The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you. 

Written by Tyger Fitzpatrick, founder of YIG.

Can you make money trading off Trump’s tweets alone?

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

There is no doubt Trump has made a name for himself as the 45th President of the United States. Only 3 of these Presidents have been impeached in the history of the United States and of these three, only one has been able to move the market so significantly with a Twitter account. It is quite remarkable to see social media making a significant impact on the Global markets with more and more people around the globe becoming immediately connected with one another.

As we progress into this technological era of social media, one must note that the market will continue to become more volatile. Becoming an investor now only requires a phone and some funds, therefore allowing the “everyday” investor to enter the market. Alongside this, the increased use of AI and programmed systems has created a market that reacts to news both fast and dramatically.

Trump’s tweets alone have the ability to shift the market a certain way, to the point where a recent study posted by CNBC said “On days when President Trump tweets a lot, the stock market falls”. The market acts this way to pure speculation alongside AI that uses frequency and key phrases in his sentences to either buy,sell, short or long ect. Trump’s activity on Twitter has since been coined by JP Morgan as the Volfefe Index. This index examination found that the key phrases used in Trump’s tweets such as “billion”, “great” and “China” were the strongest market movers especially affecting the price on 2-5 year Treasury Bonds. If you don’t know the importance of bonds and how they are priced there is more information here. These bonds will either increase or decrease price due to volatility or speculation on the country that is issuing this debt.

Now being realistic, a good investor such as Warren Buffet would not react to speculative news or in that matter even care. A long term investor will make calculated risk based on a set formula whether that consistency in financials or it’s internal performance. Some investors however trade within the day to make a small return, this is a risky game. Only experienced and highly skilled investors will make money trading on a daily basis due to pure speculation and the high levels of risk involved. So could you actually make money off Trump’s tweets?

Unless you could buy/sell within 2-3 seconds of Trump tweeting you would miss the gap. 2-3 seconds is generally the time it takes for an algorithm to buy/sell a financial instrument, therefore without an algorithm it would be too risky and physically impossible to set up a trade that quick. If however, you could build an algorithm effectively, who’s not to say you could have been already filthy rich! I highly recommend checking out the Volfefe Index by JP Morgan as it has some very fascinating data on the behaviour of these algorithms.

Here is our free, uncomplicated, and extensive ASX portfolio

https://youth-investment-group.com/portfolio/

If you enjoy our articles or are wanting to learn more, you can subscribe to us for free via email and get updates when we post new articles. From all of us at YIG, thank you for the support

The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

Written by Tyger Fitzpatrick, founder of YIG.

Raiz vs Spaceship Voyager – Which fund to choose when you first start investing?

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

In recent times, investing has been made more accessible to society as companies such as RAIZ and Spaceship Voyager have made investing platforms that are very accessible and transparent. These managed funds allow first time investors to get a feel for what it is like to invest while taking out the tricky steps of picking the correct stock at a good price or getting charged broker fees every time you buy and sell. From personal experience, I used RAIZ for the last month to see what sort of return (if any) I could achieve as well as how much money I could save with its purchase roundup features ect. In theory, these companies are revolutionising the way everyday people save and invest their money, in turn helping them improve the overall quality of life. Now say you are interested in using one of these platforms, which one should you use?

Raiz ticks all the right boxes

I recently wrote an article on RAIZ and it’s share price potential in the coming years and I must say after doing my research I decided to see for a month how much I could save using the app itself. The incentive RAIZ offers includes its partnered deals that allow you to shop online through their affiliates and get 2.5-5% back into your RAIZ account. These affiliates range from Adidas, Apple, Ebay, Kathmandu, Nike and even Uber Eats. These are all expenses that you may as well get a return on as you probably use at least one of those companies above let alone the hundred to choose from on the app. The best aspect of Raiz is its innovative way of rounding up a purchase by 45 cents ect. and adding this to your managed fund. After a few months of doing this you will establish a very strong RAIZ balance.

If we break down the portfolio performance we know that the average person would make 11.1% return each year since it’s launch. Raiz charges $2.50 monthly fee for maintenance which equates to $30 a year. If you do the math this means if you assume 11.1% annual return, you must have at least $300 to cover fee charges and make a profit. I also recommend keeping your account under $10,000 as anything above that will get charged a 0.275% commission fee, which holds substantial unsystematic risk. If you intend to invest $10,000 or more you should look into ASX broking partners to obtain a higher ROI. CEO George Lucas quotes that RAIZ is not so much a fund manager or ETF provider, it is a platform to help people save which YIG believes is a strong ethical practise/vision for the company.

Spaceship Voyager educating next gen Investors

The major difference between Raiz and Spaceship Voyager is that the Spaceship fund alerts users of current news that affects their portfolio. What this does is builds the understanding of a new investor and helps them understand why certain news would affect a share price, therefore their own portfolio. The issue I had with Raiz was that I could not do my own research on the ETFs they had bought, as they do not specify this information. Currently Spaceship has 50,000 current members which is a third of the RAIZ community however it was only launched in April last year. It will be very interesting to see whether Spaceship can develop a lead on RAIZ with better ROI. Now Spaceship has averaged their ROI as 6% almost half the average person receives when using RAIZ. The question is, does using Spaceship as a means of education to reach an end goal of investing in the stock market effectively over ride the potenial loss of 5% ROI.

The final verdict

The final decision is simple, if you want to make a better return on your hard-earned money and you already spend a lot on G&S then RAIZ is the perfect app for you. However, if you are new to investing and eventually want to build your own portfolio using a stock exchange independently such as the ASX then Spaceship Voyager is the platform for you. This information is my personal opinion, and is a result of indepth research to help young Australian’s invest. We recommend all our viewers to conduct extensive research before putting money in any security or managed fund.

Here is our free, uncomplicated, and extensive ASX portfolio

https://youth-investment-group.com/portfolio/

You can use this link to get started on your RAIZ app with a free $5 –https://app.raizinvest.com.au/invite/YN45KK

If you are wanting to learn more about the ASX and investing, join the 1800+ people subscribed to our website. We deliver daily stock market related articles and global events that aim to educate the next generation of investor. The best part is it’s free, enjoy.

Tyger Fitzpatrick, Founder.

The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

Written by Tyger Fitzpatrick, founder of YIG.