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How I am Investing in Tesla - Potential 10x Return! - YouTube
Channel: Tesla Economist
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welcome to the tesla economist please
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hit the thumbs up and remember to
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subscribe you can follow me on twitter
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and talk to me on patreon
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further to our recent video of
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discussing various leaps strategies
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which could be helpful to first watch
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there's a link in the card above if
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you've not yet seen it but after reading
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all your feedback on our collaborative
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effort and researching different leap
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strategies then i think i may have
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worked out mine also if you'd like to
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discuss your leap strategy more in depth
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with me you can do so on patreon i've
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heard a lot of great strategies from my
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viewers and tried to take them all on
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board and i couldn't really fault them
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lots of different techniques work for
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different investors this made me think
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that why is it necessary to stick to
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just one strategy now just to be clear
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to give you some idea of the level of
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risk i'm entertaining it will only be a
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small fraction relative to the actual
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shares i hold as in to be clear i am not
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using a large part of my wealth with
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leaps and if i lost all this money it
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would not really affect my life in any
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major way however if it did work it will
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affect my life a reasonable amount for
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example it would make me an additional
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profit to afford well just about every
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single tesla vehicle there is including
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the roadster but i'm playing with what i
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can afford to lose we're all in
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different stages of our lives with
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different resources perhaps you can
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afford to play with more relative to
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your net worth because you have a high
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paying job or you have rich parents or
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you're just young and winning a gamble
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this early on pays off that much more as
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for me i like the idea that i'm that
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much more involved with tesla by
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controlling more shares it's like
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betting on your favorite sports team in
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a game except with leaps your team needs
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to win by three goals hence the higher
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odds now no one can predict what happens
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in the market and clearly we may have
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potential macro issues to deal with i
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mean they are eventually inevitable but
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the thing is no one knows when it may be
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next month or it may be when tesla has
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hit 10 000 for all we know we could end
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up seeing the roaring 20s 2.0 a
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century-old cycle or something hence why
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you should be careful at the same time
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tesla could have increased its net
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profit 10 times within two years now
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even in a hard hit recession i think
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this growth will still make tesla
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drastically more valuable than it is
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today therefore everyone is absolutely
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underestimating this company because
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it's too hard to believe okay perhaps it
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might not be that high maybe that's only
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a 10 likely scenario you might think but
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if it occurred then you get perhaps 20
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times return on your investment that's a
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good risk reward return but in addition
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to that there could also be a 20 chance
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you get perhaps 10 times your money or a
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50 chance that you get four times your
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money and maybe a 20 chance of losing
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everything so imagine it like rolling a
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dice there may be one side that has lose
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it all another side that has lose half
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another side that has break even another
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that has four times your money another
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that has 10 times your money and one
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that has 20 times your money and when
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you buy a leaked contract it's like
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rolling that dice this is what an
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asymmetric investment is and that's the
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game we are playing of course those are
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just arbitrary numbers i am using but
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when the stock dips those percentages
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and potential returns increase do your
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own analysis and assign your own
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probabilities of course i've only been
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buying leaps on the big dips and have
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gotten lucky however sometimes it is
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hard to find the bottom of a dip or even
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know if we're in a dip or not now and
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right now is extra tough as we're about
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to have outstanding q4 results and new
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factories open with the most coveted
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product for any tesla fanboy the 4680
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batteries anyway as for my actual leap
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strategy it's very difficult right now
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to judge as tesla could jump up as high
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as fifteen hundred dollars if the q4
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reports are even better than we think
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and you have to wonder is one thousand
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dollars a cheap price now will i kick
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myself for not buying them when they are
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so cheap what was i thinking was i
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hoping they'd go down to 900 first so i
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could make that little bit extra or is
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everyone worried that tesla might crash
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into the 800s again and want to wait
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until then well i think i may have made
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up my mind as to what to do i think for
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starters i will reduce my risk or at
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least i feel this reduces my risk by
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only buying leaps two years out
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currently looking at january 2024 but
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the stock price would only need to
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increase about 40 percent from now until
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then in order to break even when i say
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break even but obviously there is the
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opportunity cost of not buying tesla
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shares which would have increased 40
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also so this figure might really be
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close to 60
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increase if you include opportunity
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costs but i might have a variety of
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different strike prices depending on
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what the stock price is i think i may
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buy one about now with a strike price of
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eleven hundred dollars it is currently
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about three hundred and forty two
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dollars and then use a dollar cost
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average process waiting for a further
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dip and if it doesn't dip well at least
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i didn't miss out and i will be selling
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shares in order to fund this we're
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playing with options here which means we
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can't take all the time in the world and
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simply hoddle through events as there is
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a ticking clock to expiry considering my
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main objective is to simply own as many
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tester shares as possible my thoughts
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are that if over the next two years of
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holding these leaps the stock price ever
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becomes something in the region of about
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three or four times my strike price
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which would mean i could sell one leaps
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contract and use that profit to exercise
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two or three of them then that will
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likely be my strategy i know some of you
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like to roll the dice again and simply
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buy up more leaps each time and have had
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great success in doing that as for me i
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think once i have accumulated these new
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shares then i'll wait for a dip again
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and rinse and repeat this strategy if i
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still think there is enough potential
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for tesla's stock price to keep growing
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at these same rates
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which there may very well be if tesla's
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stock price doesn't rise that much over
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the period then i may just sell these
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leaps around expiration date and renew
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them again as there is an eventual 5 to
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10x return coming over the next 5 years
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and it will surely be prudent to be
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holding some form of options when that
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occurs you see we are in exponential
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growth and have been this entire time
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except the exponential growth we've been
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seeing most of this time well it's
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somewhat hidden at least in the
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financials as tesla had been losing
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money for so long it's kind of like a
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plant growing it's been growing
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underground this whole time and when it
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breaks even finally then it comes
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through to the surface right now tesla
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is still just a little seedling at least
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relative to its future growth it still
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has yet to become a full tree we know in
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any event that tesla will need something
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like 20 times more batteries than they
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can make this year including the 4680s
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they can produce themselves we know that
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battery technology will only improve
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over this time becoming lower cost
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faster to produce and more energy dense
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tesla will have better products offering
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more value at a lower cost of production
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this is going to continually happen
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adding value to the product so people
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are willing to spend more on the product
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whilst reducing the cost through
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technology of course whilst also ramping
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up exponentially at the same time some
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people are concerned about the stock
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price going horizontal again like it has
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in the past for so long but through that
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period tester was not making profits it
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was hard to judge the value of the
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company for most people as they just saw
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more and more losses you can't exactly
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assign a pe ratio to losses now that
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tesla are past that stage and making
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profits then even in a down economy it's
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hard to ignore profits doubling in a
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year or likely shorter period there are
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still pe ratios at play although i say
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this i am anticipating a potential lull
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once the new factories have opened due
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to margins reducing whilst the new
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production lines are ramping up if this
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happens don't let it catch you off guard
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and of course i will still be around to
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support you all just like when the same
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thing happened last year and in reality
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i'm really only basing all this growth
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on the potential of tesla's production
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numbers for their vehicles there's still
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so much more to this company and i
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believe in the end the main profit is
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going to come from tesla's software
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which has barely begun can you imagine
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how much faster fsd will improve once
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dojo is online my thoughts are that it
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will simply take all the data that has
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been collected and should hopefully be
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able to come up with i don't know
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perhaps trillions of potential scenarios
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as a result and program something there
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i may be off by a few orders of
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magnitude or something but you get the
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idea dojo can train itself just like
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google's second version of alphago
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trained itself and beat the previous
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version something like 100 games of go
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to xero ai moves incredibly exponential
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well what do you think headlines like
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tesla cracks full self driving will do
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to the stock price i repeat what if
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tesla actually cracks fsd and maybe not
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this year but if your leaps are far out
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enough it increases your chances
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considerably there are of course a
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plethora of other events that may occur
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over the next two years the compact
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release tesla's lfp batteries and even a
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humanoid robot not to mention the high
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probability of a stock split which will
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make this leaps investing a lot easier
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as i think you all agree with me
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spending 30 000 or so on a contract is
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quite a bit of cash a stock split will
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make that significantly cheaper again
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let me know your thoughts in the
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comments below and we can further
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discuss this thanks for listening please
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hit the thumbs up and subscribe you can
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follow me on twitter and talk to me on
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patreon
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