Tesla Inc. (Nasdaq: TSLA) launched its IPO back on June 29, 2010. The company priced shares at $17 each.
At least measured by its 1,629% return since that time, Tesla is a roaring success. But I believe Tesla’s success story is just getting underway.
So far, Elon Musk’s firm hasn’t made a profit. And its three cars – the Roadster, Model S and Model X – are expensive by just about any measure.
Tesla doesn’t expect to start deliveries of its much-touted entry-level Model 3 sedan until later this year. That hasn’t stopped more than 400,000 people from plunking down deposits on one.
It also hasn’t stopped China’s Tencent Holdings (OTC: TCTZF) from taking a 5% stake in Tesla. Why would Tencent make an investment of that size in Tesla today?
I think I know the answer. But first, let me tell you a little bit about me.
I am the Energy and Infrastructure Strategist for The Oxford Club. I am a regular contributor to Energy & Resources Digest and Oxford Resource Explorer.
And I have my own subscription research service called Advanced Energy Strategist. I am a degreed electrical engineer and spent 25 years in the semiconductor industry designing and testing integrated circuits.
I’ve managed my own investments for more than 40 years and have been writing and speaking about it for more than 10 at The Oxford Club. Perhaps you’ve met me at one of our conferences.
Because of my background, energy, energy infrastructure and technology fascinate me. In fact, I’ve developed “Fessler’s Three Laws of Technology.”
The first law simply states… technology marches on.
No matter what anyone thinks, technology continues to advance, even during economic downturns.
Engineers and scientists know this to be true, because they are the ones making it happen. Even during the Great Depression, we had the invention of traffic signals, frozen food, insulin, Band-Aids, aerosol cans, electric shavers, Scotch tape, car radios, penicillin and jet engines.
Fessler’s second law of technology states, “When it comes to technology, changes happen much faster than you expect they will.”
All you have to do is look at any 10-year forecast for solar energy adoption, EV sales or energy storage prices. I’ll guarantee that two years from now, they will all turn out to be conservative, and not by a little, but by a lot.
Fessler’s third law of technology is my favorite… “New technology is almost always disruptive and transformative.”
Don’t believe it?
Reach into your pocket and take out your smartphone. There are more than 2 million apps available that run on it.
Where would you be without yours? How many times an hour do you check it?
How about energy storage? Last year, it shifted to a commercially viable market.
Think about this: We’ve never been able to store electricity cheaply enough to use later. The advantages of being able to do this are many.
Solar and wind farms can store excess power for use during peak periods. And utilities can level out their demand curve with stored power, lessening the demand for expensive natural gas-burning power plants.
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Tesla: Beyond the Cars, Beyond the Hype
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Source:: Investment You
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