Tonight, you have the chance to hear an astounding story.
It involves the likes of Berkshire Hathaway’s (BRK) Warren Buffett… former Presidents Barack Obama and Bill Clinton… and three Wall Street billionaires. And you, too, if you’re interested.
In fact, as a result of this new venture, you could make an extraordinary amount of money. That is, if you prepare today.
Starting tonight, the man that CNBC called “The Prophet” could help you make a fortune in 2019… in a radical new way.
- In 2000, he predicted the dot-com crash.
- In early 2008, he predicted the housing crisis and the government bailout of the economy.
- And in December 2008 on 60 Minutes, he called the bottom of the stock market – just prior to the start of the longest bull market in history.
Whitney Tilson is one of the best-known and most-connected men on Wall Street.
He’s managed a hedge fund… obtained two degrees from Harvard… and appeared in the pages of about every major financial newspaper. He knows about everyone, and probably has a picture and story about when they last met.
And today, he’s launching a new publishing business to help folks like you survive and thrive with your investing and retirement accounts.
Already, nearly 100,000 folks have signed up to listen in.
I hope that you’ll join them tonight at 8 p.m. Eastern time to listen to his newest prediction. He plans to share which investments you absolutely must buy now… which you should avoid (like the company featured in the essay we’re sharing from Whitney below)… and why using his strategy could change your approach to making money forever.
Friday, March 1 was the beginning of the end for electric-car maker Tesla (TSLA)…
Ever since I (Whitney) got burned shorting the stock in 2013 – watching it march higher from $35 to $205 a share – I’ve warned my readers about betting against CEO Elon Musk and his team. They’ve simply pulled too many rabbits out of their hat over the years.
Though Musk often behaves like a narcissistic brat, he’s also an incredible entrepreneur with a remarkable track record. He has almost single-handedly pushed every major car manufacturer in the world to invest heavily in electric vehicles, and we’ll all be better off for it. (The same can be said for SpaceX and the aerospace industry.)
But Tesla has almost done too good of a job. Now, it faces a massive wave of competition. Electric cars from high-end European manufacturers Audi and Jaguar are already vastly outselling Tesla’s Model S and Model X cars in Europe. Meanwhile… Toyota, Kia, Hyundai, Volkswagen, Nissan, and Renault are developing their own lower-priced electric vehicles.
As a result of this new competition, I told readers of my free daily e-letter last month that Musk has no more rabbits to pull out of his hat.
I believe Tesla’s stock – which closed recently around $267 a share – will be trading below $100 by the end of 2019.
I don’t get in the habit of making these types of calls often…
As Steven so generously pointed out above, I’ve made some big calls – but I only do so when three things line up perfectly, as I believe they do now for Tesla: the fundamentals, my “boots on the ground” research, and investor sentiment.
The company’s fundamentals are terrible. Demand is weak, inventories are piling up, and investors are finally starting to lose confidence in Musk.
A couple of weeks ago, Tesla reported a huge miss…
It delivered 63,000 vehicles in the first quarter – far lower than Wall Street’s estimates of 76,000. That number represented a stunning 31% drop from the previous quarter. The stock got clobbered on the news, falling more than 8% in the following day’s trading.
But the miss wasn’t a surprise to me, thanks to the behind-the-scenes research I’ve been doing.
For years, I’ve warned my short-selling friends about shorting Tesla. It’s extremely dangerous to short open-ended growth stories based on fundamentals alone. The company has indeed grown its revenues nearly 200 times over the past decade, and its cult-like followers step in to buy on every dip. Trying to short a stock like that is a good way to get your face ripped off.
That said, it can also be extremely profitable to short these story stocks when the growth is busted, but it’s not priced into the stock yet. (That’s exactly what happened with 3D Systems in 2015.)
Tesla has more red flags than just about any company I’ve studied in my two decades on Wall Street…
With a market cap of $46 billion – nearly that of General Motors (GM) – the stock is still priced for perfection. This makes no sense given that sales plunged last quarter and the company is closing stores, slashing prices, laying off huge numbers of employees, and for good measure, declaring war on the U.S. Securities and Exchange Commission!
(Plus, I’m 99% certain that Tesla is using extremely aggressive accounting, and I believe there’s at least a 50% likelihood that the company is committing outright fraud.)
Consider this story my former business partner, Glenn Tongue, told me. He is one of the biggest tech geeks I know. He bought (and loved) a Model S, and recently purchased a Model 3. He shared the following mind-boggling anecdote with me…
Last September, I sold my Model S to purchase a souped-up Model 3 – the performance version with breathtaking acceleration. I was excited when I first received my new car. But after a short while, I began to miss the features and roominess of the Model S. And then Tesla cut its prices on the Model 3, which made me feel like a chump for having paid a higher price. So I called Tesla and said I wanted to sell my new car back to them. To my surprise, the company let me.
As it turns out, I still have the app on my phone that allows me to track my old car’s location, so I was curious to see what Tesla did with it. The answer: Not much. The company immediately moved it to a used-car facility where it has been sitting in an open lot ever since, all winter. The battery has long since drained to zero. It just sits there, losing value every month.
Something isn’t right here. Why isn’t Tesla selling it? Is it even trying? Why isn’t the company periodically charging it to keep it in good enough shape to sell at some point? How is it accounting for this car? Has it taken a write-down? How many more cars are there like mine?
Another big warning flag is the huge number of departures by senior executives. I’ve never seen anything like it. This graphic that Yahoo Finance put together captures it beautifully…
Notice how heavily skewed the departures are in the legal and accounting areas of the company. That’s exactly what you would expect to see if fraud is occurring.
Tesla is in deep trouble…
As the first mover, the company had nearly the entire electric-vehicle market to itself, which led to incredible growth in recent years. That has led Musk and his loyal followers to dramatically overestimate the true demand.
That’s easy to do with new, innovative products – which early adopters eagerly buy. But very few such products go mainstream. For every blockbuster hit product like Apple’s (AAPL) iPhone, dozens of others fizzle out.
No doubt, Tesla’s cars are extremely appealing for wealthy, environmentally conscious tech lovers who are willing to spend a lot of money to drive a cool new toy. But that’s a niche market.
Tesla recognizes this, which is why it developed its much-hyped, lower-priced Model 3. But as Glenn discovered, it’s not nearly as good of a car. So it’s not surprising that once Tesla fulfilled the big backlog of demand from early adopters, sales appear to be falling off a cliff.
I don’t think the big sales shortfall in the first quarter is a one-time hiccup. Instead, it’s likely a harbinger of things to come. Sales are going to be under even more pressure as competition ramps up.
And even if Tesla’s big price cuts stimulate sales, what will that do to the company’s margins? It’s not clear, for example, that Tesla makes any money at all selling the lowest-priced ($35,000) version of the Model 3.
As for Tesla’s investors, even the biggest bulls are growing skeptical…
Galileo Russell, the young millennial host of a finance-focused YouTube channel, gained the Tesla spotlight last summer when Musk cut off “bonehead” Wall Street analysts on an earnings call and instead had a conversation with the 25-year-old.
It’s a credit to Russell that he’s beginning to question all the insane, inexplicable things that the company and its CEO are doing. Most people I’ve found do the opposite once they’ve committed to something, especially if they’ve done so publicly: They dig in their heels, block out disconfirming information, and attack anyone who questions them.
In contrast, Russell hosted a 28-minute YouTube video last month with his tens of thousands of followers in which he outlined his concerns and practically begged Tesla to raise money. Why it hasn’t done so remains a great mystery, but its failure to do so could be its undoing.
Still, you have to give Musk and his team credit where it’s due…
They’ve successfully navigated through one crisis after another for years now, thanks mainly to huge demand for their cars. But now that this appears to be ending, I think their luck has run out.
In fact, I’m so sure that this is the beginning of the end that last month, I offered a friendly wager. I put $10,000 of my own money on the line and challenged Tesla bulls that if the company reports even one profitable quarter this year, I’d donate to the charity of the winner’s choice.
A dozen of my readers – including my friend and famed short-seller Andrew Left, who’s super-bullish on the stock – took me up on the bet! After this week’s news, I’m more confident than ever before that they are going to need their checkbooks by the end of the year.
Mark my words: Tesla shares are going to crash by the end of the year.
One last note before I sign off…
I’m appearing on camera tonight to discuss my biggest investment prediction in 20 years.
I’ll be giving away the name and ticker of my No. 1 retirement stock in America just for tuning in. I hope you’ll join me. Again, you can save your seat by clicking right here.
Tesla isn’t the only electric-car maker at risk…
There are now 486 EV manufacturers registered in China, more than triple the number from two years ago. While sales of passenger EVs are projected to reach a record 1.6 million units this year, that’s likely not enough to keep all those assembly lines humming…
Congrats, you’ve spent your time so far this year working for the government…
Americans will work for 105 days of the year to pay their collective $5.42 trillion tax bill – a figure equal to about 29% of Americans’ incomes.
President Trump’s tax cut was really a tax cut… even if few in the media like to acknowledge it.
“To a large degree, the gap between perception and reality on the tax cuts appears to flow from a sustained – and misleading – effort by liberal opponents of the law to brand it as a broad middle-class tax increase.”
The consequences of entitlements and rising debt will be severe:
Health entitlements – Medicare, Medicaid, Obamacare – and Social Security are the largest and fastest growing programs. Unless Congress fixes these four programs, they – and the ever-growing interest payments on the national debt – will consume every dollar of taxes paid by 2041. That leaves no money for anything else.
These stores aren’t coming back.
Less than halfway through April, American retailers have announced plans this year to shut 5,994 stores, exceeding the 5,854 announced in all of 2018.
This is a long time coming. But is it too late?
The 3.8% U.S. unemployment rate has exacerbated a skilled labor shortage that had been building for years. To turn the tide, American’s blue-collar industries are adopting a blunter recruiting approach by touting how new entrants can earn more than some college graduates, without incurring tens of thousands of debt.
And let us know what you’re reading at [email protected].
Publisher, American Consequences
With P.J. O’Rourke and the Editorial Staff
April 17, 2019