Good afternoon,
In case you were wondering about the lack of a message last week, the WMR was on vacation. International style. At our wife’s insistence, we took the family and hopped the pond, if you will, and spent a few days in London and a few more days in Paris. Superbe visite! Experience formidable! Saw the sights, many of them anyway, palaces and castles and churches and museums among others. Had tea with the Queen. Spent some time wandering the shops and cafes and patisseries and sampling the culinary wares. We liked London fine, but we loved Paris more. Our youngest daughter became especially fond of the wonderful French treats known as macaroons. We estimated that she consumed at least a dozen per day in an attempt to eat her body weight in the tasty confection. Prior to the trip, neither of those cities was on my personal bucket list to visit, but since my wife is smarter than me (no surprise to those of you who know her,) her decision to take us there was a good one. As are most of her decisions.
Visiting older countries and older cultures did make us realize something. The United States is only a toddler. Not only in the sense that we act like a spoiled one from time to time, which we undoubtedly do, but in the sense that we’re only a couple of hundred years old. After visiting castles and churches that are a couple of thousand years old and walking on the same floors that millions before us had, we gained some appreciation for history. We also had some trouble reconciling in our brain how these engineering marvels were built hundreds and hundreds of years ago without computers to design them and without heavy diesel powered machinery to erect them. And the structures have stood the test of time. Fascinating.
Which brings us around to part of what we do, investing. We’ve mentioned before, both literally and in terms of investing, that the world is a big place. The US is home to many, but of course not all, of the great companies or great investments available in the world. This is your reminder to keep your eyes open for opportunity from wherever it may be found. And your reminder that macaroons should be consumed immediately. They, in contrast to the castles in which they are sold, are perishable.
Speaking of investing, here is, in our opinion, a sure sign of a bubble stock. Tesla, the automaker, is now more valuable than General Motors.
We don’t mean to hate on Tesla, we think their vehicles are pretty cool and their Cheerleader In Chief, Elon Musk, is most certainly a visionary. Google him sometime if you don’t believe, he’s got his busy hands and fertile mind on all sorts of projects. (Sidenote – You should also Google Nikola Tesla, for whom the company is named, and learn about his fascinating life and exploits as well.) We just find it hard to believe that the company is worth more than GM. Tesla sold only 76,000 cars last year, which likely would have been far fewer if not for a governmental electric car tax subsidy. GM sold 10 million. And not yet in any year of its existence has Tesla earned a profit. GM earned $9 billion last year. Once again, without government intervention in the form of subsidies and low cost loans, it’s likely that Tesla would have difficulty “continuing as on ongoing concern” to borrow an aptly descriptive accounting phrase. So how is the company worth $51 billion and the share price north of $300? Great question. The WMR is confounded by it as well. One analyst is quoted in the article as saying “In many ways, TSLA seems to play by its own rules.” Maybe so, but in all likelihood, the game will eventually catch up. This is not a recommendation to buy or sell TSLA or GM, just a WMR observation we feel compelled to express.
In a poetic bit of irony, it seems that the Tesla headquarters is short on parking spaces for its employees.
https://www.wsj.com/articles/elon-musk-has-an-awkward-problem-at-tesla-employee-parking-1491926275
Uber anyone?
Congratulations to Spain’s Sergio Garcia on his win at the Masters last weekend. After 73 starts in major tournaments, his time finally came.
http://www.masters.com/en_US/index.html
Just wondering, for no particular reason, but do you think that Tom Hanks just signs his name “thanks”?
LF23 – “A ship in harbor is safe, but that’s not what ships are built for.” – John A. Shedd.
Have a great week.
Michael J. Acho, MBA, CFP®
Private Wealth Advisor
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Lincoln Financial Advisors/Sagemark Consulting
1000 Town Center, 26th Floor
Southfield, MI 48075
248-948-5100 direct
248-948-5101 fax
248-933-4339 cell
Michael.Acho@LFG.com
http://www.linkedin.com/pub/michael-acho/27/913/3a8
