To The Moon

Tesla Q3 watch out for $175

Based on the price movements caused by its 2022 Q3 delivery and AI day, I foresee Tesla stock a $175-$250 trading window in the near future (till the Q4 delivery). I see more downside than upside in the near term. Although a $175 price, if reached, would represent an excellent entry point for both swing trading and long-term holding.

As detailed in this full-length article on Seeking Alpha (link below), a $175 price offers good etnry point for both short-term swing trading and long-term holding. For short term swing trading, the $175 price, if reached due to jitter caused by its Q3 earnings report, would represent a 57% decline off its recent peak, closest to the largest retraction of 60% only during the COVID fire sale.

https://seekingalpha.com/article/4545981-tesla-tsla-watch-out-for-entry-opportunity

Microsoft is fair valued at $220

Buffett is not afraid to apply risk-free interest rates as the discount rate for perpetual compounders that he understands well. And neither should you. Massaging the discount rates may feel mathematical but is ultimately gibberish (and can get you any answer you want).

Microsoft, even though Buffett never bought it, should qualify as a perpetual compounder that deserves this treatment. With this royal treatment, I see Microsoft’s valuation risks have largely faded away and it is trading near fair valuation. As detailed in another full-length article published on Seeking Alpha (link below), its fair value is about $220base on a discounted dividend model (“DDM”) using the following inputs:

• A long-term risk-free rate of 4.5% as the discount rate, which is consistent with the Fed’s current dot-plot and also consistent with average 10-year treasury rates in the long term.
• TTM dividend rate of $2.48 per share in the analysis.
• Terminal dividend growth rate estimated by the product of its average ROCE (67.3% as shown below) and its reinvestment rates (assumed to be 5% based on its long-term historical average).

https://seekingalpha.com/article/4546271-microsoft-or-apple-lets-ask-warren-buffett

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