Whitney Tilson’s email to value investors discussing the DIVAS – the next FAANG stocks; his interview about Tesla; warring anecdotes; Rivian R1T pickup truck; Ford Mustang Mach-E.
1) Longtime readers know that I’m bullish on Facebook (FB), Amazon (AMZN), and Google’s parent company Alphabet (GOOGL).
[activstinvesting]Q4 2019 hedge fund letters, conferences and more
But I’m also realistic. While I think they’re good bets to double, it’ll likely take three to five years. The era of huge short-term gains from these stocks is almost certainly over.
Thus, I’m always on the lookout for the next great “moonshot” stocks.
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2) Speaking of popular tech stocks, I did a seven-minute interview on Friday with Cheddar TV about Tesla (TSLA), which you can watch here.
rivian r1t pickup truck to kill Tesla cars?
3) The anecdotal data on the company’s cars are all over the place – I don’t know what to make of it. One friend writes:
Out of my 30-plus friends who’ve got a Tesla, a majority of them fall into the following categories:
- Tesla had to buy back because of lemon law.
- Customer told Tesla he/she would sue and/or pursue lemon law, so Tesla bought back the car preemptively.
- Car died and Tesla won’t fix, so it’s sitting still like a brick.
- Spouse doesn’t dare to drive the car anymore because it tends to break down and require a tow, way too often.
- Owner is insanely unhappy with quality/service/repair and/or the sharply rising insurance bill.
Yes, I have a few friends who are happy with theirs. It’s not 10%, but it’s not 50% either. Perhaps a third. They’re happy – for now. But just wait until it hits them :)
But my experience is exactly the opposite: It’s not 30, but maybe a dozen of my friends have Teslas – and they love them with an undying passion. True evangelists.
My analyst Kevin (a longtime Tesla owner and shareholder) weighs in:
Those negative anecdotes don’t align with any of the data I’ve seen – for example, Consumer Reports concludes that “Tesla owners are more satisfied than any other auto brand’s.” And Bloomberg’s survey of 5,000 Model 3 owners reached similar conclusions.
Finally, my old friend Arne Alsin of Worm Capital makes the best bull case I’ve read for the stock in his fourth-quarter letter.
4) I saw two of Tesla’s competitors at the Consumer Electronics Show two weeks ago, and they both looked very cool. I thought the Rivian R1T pickup truck was very stylish, unlike the ridiculous-looking Tesla Cybertruck. Deliveries are slated to begin by the end of this year.
I also liked the look of the new Ford Mustang Mach-E, which is slated to arrive in dealerships later this year.
Here are some reviews of it:
- 2021 Ford Mustang Mach-E Will Please EV Fans, Perplex Mustang Loyalists
- Ford Mach-E: It’s a Mustang, an EV (Yes), an SUV (Gasp), Very Quick, and the Future of Ford
- Ford’s Mustang Mach-E is an electric SUV with up to 300 miles of range
Tesla’s competition so far has been pretty weak, but I think that’s going to change dramatically in the next year thanks to Rivian, the Mach-E, and dozens more great electric cars that are coming out (more than 200 by 2023, based on current announcements). If I’m right and Tesla’s growth stalls, the stock may be an incredible short someday… but I don’t think that day is here yet.
Best regards,
Whitney
