Is Tesla Stock Under Threat?
There have been a few news stories about crashes involving driverless cars, but does that mean we should be worried about Tesla Motors Inc (NASDAQ:TSLA)? Can these accidents bring down the value of Tesla stock (TSLA)?
Before I get to those questions, there’s something you should know about technology stocks. They are natural disruptors; they challenge the status quo. This is why investors shouldn’t try to make a quick buck by flipping them in a hasty trade.
Instead, look for what I call “Eternal Winner” Stocks, or “EW Stocks.”
These investments don’t need much babysitting. You don’t need to check in every day to make sure the price is soaring. Just accept there will be volatility in the short term, but that the long-term gains could be massive.
Over five years, 10 years, or 15 years, EW Stocks move straight up and to the right. They can multiply your wealth and, better still, you never have to let them go. These stocks are eternal. You could potentially hold these until retirement, or even pass them on to your kids.
EW Stocks are proven money-makers. If management has steered the stock to higher returns in the past, you should trust them to navigate. Fight the instinct to pull out of the stock at the first sign of trouble. Sometimes it take awhile to execute a strategy, or for the market to understand what’s going on.
TSLA stock is definitely an EW Stock.
Think about it: a $10,000.00 investment in Tesla stock when it first appeared on the market would now be worth $93,340.00. Any investor who was willing to wait out the near-term volatility made a killing on TSLA stock. .
Here’s the best part: those gains are just the beginning…
What This Means for TSLA Stock
The first reported self-driving Tesla crash took place in July. Tragic as it was, Tesla insisted that its vehicle was not at fault. (Source: “Tesla Autopilot crash in Montana: Drivers reveals new details and claims a ‘cover up’ by Tesla,” Electrek, July 22, 2016.)
Tesla had evidence showing that the driver had lifted both hands off the steering wheel. Tesla’s “Autopilot” feature is like cruise-control on steroids, in the sense that it is aware of its surroundings, but you’re not allowed to take your hands off the steering wheel. Here’s the company’s statement:
What has happened in these types of accidents is horrible, but I don’t think it will affect Tesla stock. Think about it: all the big automakers are getting into driverless tech. General Motors Company (NYSE:GM), Ford Motor Company (NYSE:F), Fiat Chrysler Automobiles NV (NYSE:FCAU) … they are following TSLA down the road to self-driving cars.
To me that suggests self-driving tech will become normal over time. The technology will improve to the point where fully autonomous cars can drive 10 times better than a human. At that stage, driverless tech will replace the trucking industry, taxi industry, and who knows what else.
The possibilities are nearly endless, which is why I consider Tesla stock an Eternal Winner stock. It’s currently trading at $206.00, almost exactly in the middle of its 52-week trading range. Tesla stock’s share price has been volatile over the last six months, but that hardly matters if you stretch the timeline across five to 10 years.
Don’t forget that TSLA stock has skyrocketed 934% since its initial public offering (IPO) in 2010! CEO Elon Musk and the team at Tesla clearly know what they are doing, so sit back and watch the share price of this EW Stock continue to soar.