In today's podcast, Kip dives into the latest market updates and some significant financial news, especially highlighting Tesla's impressive earnings report. Despite a challenging day for the market overall. Kip touches on the broader market conditions, offering insights into trends and expectations as we approach the election period. Stay tuned as Kip unpacks these developments and what they could mean for your investments.

Don’t look back because the market is closed. Good Wednesday afternoon, everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. Not a great day for the market. This is going to be, I’ll tell you an abbreviated podcast today. Tesla just reported earnings, and it was very good news. Stock is up 8% of the news.

I’m going to cover that just in a moment. As you know, we’ve been pounding the table on Tesla. We called it the number one stock to own for the innovation revolution. Today’s report was a game changer. I’ll get to that in just a moment. Now, the market did finish lower today. Remember, we’re just coming off a six straight weeks of gains in the market. Okay, for NY, for S&P 500, and for the Dow Jones, those weeks, these are all time high after all time high.

[00:00:41]:
So we got a little bit of a shakeout here. But again, the markets are overbought. This is not a surprise to us. Everyone’s been waiting for an October surprise. We may have seen that a bit today. We covered this in this morning’s jury letter, the Department of Homeland securities. This may not be anything, but it may be something. DHS today announced they’re having a cybersecurity exercise on election day.

Now, if that rings a bell, that’s what happened on 911. At the same time that planes were in the air hitting buildings. NORAD had their own large scale cybersecurity exercise going on at the time, which is why they didn’t get military jets up in the air to potentially take these planes down before they hit the buildings because they didn’t know what was real versus what was a training exercise. So again, DHS announced this last night. A lot of people are talking about this. Are we going to have an October surprise? It is something we’re paying attention to. Dow Jones today did finish down 400 points. That’s nine tenths 1%.

That’s 500. Also down nine tenths 1%, rose 2008 tenths percent. Our loser on the day was Nasdaq, down 1.7%. However, the semis only finished down a half percent. We are bullish on the semis. No, they have not reached a level where you say a pound the table buying opportunity, but they have hit oversold levels. The fourth quarter is not only the best quarter for the market, it’s certainly the best quarter for the semiconductors and for tech stocks. Once this nervous period around the election is over with, watch out, watch, especially if Trump wins.

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Watch what happens to tech stocks. Watch what happens to the semis. So that is an area we are hyper focused on. All right, let’s get to Tesla here. Here we go. This was a. I think this is a game changing quarter. Listen to these numbers.

Tesla actually crushed the bottom line, getting stock up 8% after hours. The earnings call starts here in just a few minutes, which is why this is going to be abbreviated podcast. We’ll be on that. We report back the results of that in tomorrow morning’s very letter. Earnings per share came out 20% above consensus. Operating income, 38.8% above estimates. Gross margin was 19.8% versus estimates of 16.8%. That’s a big.

Because they’ve gone through significant cost cutting. They’ve been forcing competition out of the business. Musk started this over a year ago. It is working. They’re increasing their margins even as they have cut cost aggressively and as they prepare to transition to their sub $30,000. Cardinal and the robo taxi, folks, if Tesla can produce, and they’re going to do this, Tesla can produce a sub $30,000 car and the robo taxi. That’s direct competition. Matter of fact, it’s beating the combustible engine, Tesla sales.

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We’ve run these numbers. Tesla sales are going to be astronomical. Remember Tesla’s entire market cap right now? Yeah, I’ll give you the updated. Because it’s expanded today, of course, on this news. Tesla’s entire market cap at this price of $233 a share is only $742 billion. This is going to be very soon. A trillion dollar market cap company, and within five years, a $5 trillion market cap company. That’s what I call a ten bagger inside of five years.

Back to the numbers, because, again, these are mind bending results. Free cash flow was 70% above estimates. Check this out. Free cash flow came in at $2.47 billion versus estimates of $1.61 billion. Again, this is a game changing quarter. Tesla is a must own stock. Get ready for to happen on the earnings call. We expect to hear something from Elon, maybe more specifics about timing for the sub $30,000.

Car and robotaxi. But to stress this with this report, Tesla’s proving that they can increase the bottom line and make more money, increase their margins with lower prices. That is the key. Anyone short this stock is going to get hurt here. So, again, it’s our number one stock for the innovation revolution. What else to report today? Just quick insight. The internals were bad. Not horrible, though, but not great.

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NYSE. Excuse me? NYSE was just over two to one negative, advanced decline. Nasdaq ran at three to one negative. Volume was at two to one negative, essentially for both. Again, these are not, it’s not a horrible day. And we had more stocks in a 52 week high than 52 week low. That means we have not have a negative reading there from the August 5 lows. That’s a pattern change, I think.

We think a bullish one at that. One more comment before we wrap today. As we told you starting yesterday in our very letter, and Tyler covered all this in his podcast extremely well. Well, about what’s happening with this transition, the fact that people are nervous about rates, they shouldn’t be. People are nervous about the dollar. They shouldn’t be. Both the ten year yield and rates in the dollar are hitting extreme overbought on steroids. This is when, Pat, this is when trends reverse.

Remember, the primary trend is lower for rates, lower for the dollar. Right? Look at these longer term charges. See what we’re talking about? So we’re seeing a counter trend move now that is now meeting significant resistance at the 200 day. This is for both the dollar and ten year yields, hitting the 200 day moving average and hitting our most overbought reading a designation we call extreme overbought on steroids. Great setup as we come out of this election insanity and move back into more normal times, especially assuming if Trump wins. And how about Musk, right? Red pilled Elon Musk crushing this quarter. Imagine what he’s going to do as part of a Trump administration. Tesla is going to be a darling of the, of Wall street once again.

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We’ve been pounding the table on this stock. We continue to pound the table on this stock. Gold today. We told you starting yesterday morning in a very letter that both gold and the miners had hit extreme overbought on our VRA investing system, and they were due for a pause. Not a sell signal, just a pause. Here we go. Today, gold today down $30 an ounce, 27.29. Silver down 1%.

Silver down 3.3%. And the miners today, GDX, down 2.5%. So again, not a reason to sell, it’s a reason to pause your buying. We’ll let you know, especially for our parabolic options, which we’ve been crushing it here. It’s been a great parabolic options program. We think it’s going to continue. And we’ll let you know when we are ready to start buying. GDF calls again for parabolic.

And in the Vora letter, we’ll let you know when we’re doing that. In the VOR portfolio as well. Again, not a sell signal, just a reason to pause your buying. That’s how we’re approaching it. I think that’s a good call. The market’s looking like it’s backing up that call so far. All right, folks, that’s it for today. Going to get to this Tesla earnings call.

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We’ll report that fully in the very letter of the morning. Always appreciate you. Listen, have a great night. We’ll see you back here again tomorrow after the close.