Why the Stock Market and Tesla Turbulences DON'T SCARE Me
Overall Thesis
Bhakdi gives three reasons not to worry about the market turbulences: ADP private payroll data shows worsening employment which supports a near-certain Dec 9 Fed rate cut, CPI is being pulled down by deflation in shelter (33% of index), fear and greed index at 22 is contrarian bullish, and the Mag 7 are disciplined cash-flow machines rather than a bubble. Maintains caution about short-term volatility and a possible Tesla air pocket until April/May 2026 robotaxi cash flow.
Narratives
Tesla's 178x P/E looks insane but is justified by close to infinite multi-trillion dollar cash flow streams from humanoid robots and autonomous transport where Tesla has potential monopoly for multiple years. Bhakdi remains super bullish on mid and long term 6-12 months but warns of a possible tactical air pocket before April/May 2026 robotaxi cash flow arrives. Not a time to be leveraged.
Key Arguments
- 178x P/E justified by enormous unlocked cash flow from humanoid robots and autonomous transport
- Tesla has potential monopoly on both verticals for multiple years
- Revenue streams multiple magnitudes larger than current
- Super bullish on mid/long term 6-12 months
NVIDIA at 33x forward P/E is cheap given growth rate compared to Apple at similar multiple. Every chip sold is completely sold out and utilized - no dark fiber like the internet bubble. It's the largest company on earth with potential to become even larger.
Key Arguments
- 33x forward P/E is cheap for NVIDIA's growth rate
- Every chip sold out and utilized - no dark fiber
- Potential to become even larger company on earth
Google at 26x forward P/E was just bought by Warren Buffett, validating it. Disciplined execution, not a bubble.
Key Arguments
- 26x forward P/E
- Warren Buffett just bought Google
Bhakdi sees the bull market as not over with three supportive factors: high probability of Dec 9 Fed rate cut given worsening ADP employment and shelter deflation pulling CPI down, fear and greed index at 22 is contrarian bullish since all the sellers have sold, and Mag 7 are disciplined cash-flow machines at reasonable forward P/Es. He agrees with Tom Lee on Q4 rally possibility.
Key Arguments
- 95% probability of Dec 9 Fed rate cut - market is pricing lower probability, creating alpha
- ADP private payroll data showed worst month since March 2023 - bad for workers but good for Fed cut
- Shelter is 33% of CPI and is deflating (rents coming down)
- QT ends December 1st
- Fear and greed index at 22 - extreme fear is contrarian bullish since all sellers have sold
- Tom Lee is correct about Q4 rally potential
Meta is probably the best idea outside Tesla at 21x forward P/E with a secret AI strategy that will transform everything. Video coming out this week on Meta.
Key Arguments
- 21x forward P/E - lowest of hyperscalers
- Best idea outside Tesla
- Secret AI strategy will transform everything
Apple at 33x forward P/E is too expensive given its growth rate compared to NVIDIA at same multiple. Bhakdi is not an Apple fan.
Key Arguments
- 33x P/E too high for Apple given growth rate
- Bhakdi not a fan