What Independence Day Means to Me

What Independence Day Means to Me

Political Commentary

Update on Tesla Motors (TSLA)


For more than 30 years, my July Fourth celebration has included marching in the local Horribles Parade while playing my clarinet in Wilson’s Band.

Wilson’s band, which celebrates its 50th anniversary this year, is a rag-tag group of some 30 volunteer musicians of varying ages and skill levels. We play the same three songs every year, and we have a lot of fun.

But what’s a Horribles Parade?

It’s an old (and odd) New England tradition. It’s similar to other patriotic parades, in that it has our marching band and innocent children on red-white-and-blue floats. But it’s dissimilar because most of the parade consists of floats commenting on political issues large and small, and they’re not always in good taste!

But they sure are funny!

This year, I have little doubt I’ll see at least one float about ex-New England Patriot Aaron Hernandez, who was charged with murder last week. We may see something on mobster Whitey Bulger, who’s on trial for numerous Boston murders. And we’ll probably see supportive displays for the Boston Marathon victims and for the Boston Bruins, who almost won the Stanley Cup. On the national scale, the President (whoever it is) is often a target of criticism, and this year I ‘m hoping for commentary on the secret government surveillance program, PRISM. And on the local level, anything is possible, from criticism of the mayor to celebrations of school sports teams. What we won’t see are witches; those are for the tourists, and this is a decidedly local event.

When all is said and done, in fact, the greatest value of the Horribles Parade is that it builds community. It’s a day for people to meet on the street and simply enjoy being neighbors. And if they get to celebrate or criticize something at the same time, well, that’s a great American tradition, too.

Which brings me to the Internet, which as we all know has provided a platform for anybody to voice their opinion on anything, and in the process to build virtual communities among people who are geographically distant.

One such platform for such community building (and opinion-venting) is We The People, the online communications tool launched by the White House in September 2011. On We the People, anyone can start a petition, and if enough people sign it, the administration will respond.

I can’t say whether it’s been a big success yet, but I do believe it helps the President and his staff to understand a little better what people are thinking, and that’s a good thing.

And like our horribles parade, We The People can be both serious and funny.

For example, after the Newtown, Connecticut, shootings, a petition for new gun-control measures reached 100,000 signatures (the current threshold that guarantees a response from someone at the White House) in 24 hours.

And right now, the most popular petition, with more than 367,000 signatures, asks to “Legally recognize Westboro Baptist Church as a hate group.”

Also serious, but quite unlikely to influence the President at the moment, is the petition to “Pardon Edward Snowden,” which has more than 125,000 signatures.

On the lighter side, a petition to “formally recognize Half Christmas on June 25 as a national holiday” has 475 signatures.

And a petition to “clean house at the BLM’s Horse and Burro program” has 738 signatures. I know, it’s probably a serious issue, but I think the initiator, S.S. in Arcadia, Florida, could have found a better phrase than “clean house.”

But that’s okay. The important thing is that S.S. has a platform, and if enough people feel similarly, their voices will be heard, and they will get a response.

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Interestingly, what drove me to We The People last week was the news that there was a petition to “allow Tesla Motors to sell directly to consumers in all 50 states.”

Tesla Motors, as my regular readers know, makes an absolutely wonderful—if expensive—electric car. Not only was the Tesla Model S named Car of the Year by both Motor Trend and Automobile Magazine, it also earned the highest score ever given by Consumer Reports.

But you can’t buy a Tesla through a “regular” automobile dealer. Tesla likes to sell direct to its customers (just like Apple), and at a fixed price. There’s no haggling. But in some states, most notably Texas, North Carolina, Minnesota, New York and Virginia it is either difficult or impossible to sell a car directly to consumers, not least because auto dealers have a strong lobby in Washington dedicated to protecting their interests.

The petition explains, “The state legislators are trying to unfairly protect automobile dealers in their states from competition. Tesla is providing competition, which is good for consumers.”

Right now, the petition has more than 95,000 signatures, and if it gets 100,000 by July 5 it will earn a response. You can sign it here. 

Of course, if you or a family member is in the auto dealership business, you may choose not to sign. But for anyone without ties to the auto dealership business, I think this is a no-brainer. Studies show that dealers add, on average 8% to the cost of a car, and that’s not counting the time wasted bargaining on the price!

Hopefully, someone at the White House will hear the public’s voice and help remove the roadblocks that prevent Tesla (and other manufacturers!) from selling directly to their customers in a few states.

But even if they don’t, I still think Tesla (TSLA) is a great investment, and I’m not alone!

In fact, just two weeks ago, on June 24, Mike Cintolo, editor of Cabot Top Ten Trader, recommended Tesla as a buy. Here’s what he wrote.

“At this point in the market’s correction, Tesla Motors remains the top glamour stock in the market. (By glamour stock, we generally refer to a rapidly growing, revolutionary firm that is quickly gaining sponsorship, but can’t yet be called an institutional favorite.) Usually with such a stock, there are plenty of doubters, and that remains the case with Tesla; the firm’s voluntary, small recall of 800 Model S vehicles produced in early June caused the naysayers to come out in full force, for instance. And even last week’s “news” of Tesla’s successful battery switch (swapping out a car’s battery with a fully-charged one), which should help alleviate range anxiety, was met with some jeers. But Tesla is clearly not one of the strongest stocks in the market because of the present; the company is likely to make only small profits this year as it delivers as many Model S sedans as it can. The idea here remains that Tesla has stepped so far out in front in the electric vehicle market that it should grow many-fold as its Model S, its upcoming Model X crossover (deliveries likely late next year) and, eventually, its lower-priced sedan hit the market in the years ahead. And investors are willing to pay up for that today. Obviously, there are risks, especially if Model S demand softens for some reason. But Tesla has all the makings of a big stock if management executes and things break its way.”

Back then TSLA was trading at 101. Today it’s up over 115, in part because an analyst from Jeffries put a target of 130 on it this week. Short-term, that’s extended, but long-term, I remain very bullish on the stock.

So, you could simply buy the stock right here, but then you’d be on your own. What I recommend instead is that you take a risk-free subscription to Cabot Top Ten Trader, to get Mike’s latest insight on the stock, and many more like it. 

Yours in pursuit of wisdom and wealth,

Timothy Lutts
Editor of Cabot Stock of the Month

Related Articles on Tesla:

Tesla Motors is Overvalued AND Undervalued

Tesla Motors—Is It Too Late to Buy?

Tesla Motors Long Term Future

Video: Tim and Antony Currie of Reuters Breakingviews talk about Tesla on CCTV


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