OMG! The death cross

Frankly I don't give a $%&^! Is this the end of the world? I think I referenced this summertime activity in my April 7th video, said to monitor for leaders if and when we had a summertime lull, gave examples from a few years ago. Last year we had about an 18% pullback in the spy from 122 to 101, then took off BOOOM! Perhaps we get the same, though many say 3rd year bull not so good. My plan is to go over a lot of charts in coming weeks and decide on what to focus on in the coming months. Click chart for larger.

The Big Money

I have recently read another good book in the theme of buy and hold like Lynch, in fact Lynch reviews the book. If you want to do a search for it the ISBN is 0743258703

The book tells good stories about how analysts used to do business. It suggests finding stocks based upon: Business Model, Assumptions, Strategy, Management. It advocates following seven steps of: Market timing, patience, knowledge, discipline, emotions, time horizon, benchmarks.

If you are not a purely daytrader I suggest this book to you. I welcome discussion of stocks that fit the philosophy of this author.

Some good reads:
Smash the debt Ceiling: http://www.newyorker.com/talk/financial/2011/08/01/110801ta_talk_surowiecki




Neat article on a rich man and his company: http://www.newyorker.com/reporting/2011/07/25/110725fa_fact_cassidy

Rich mans rules: http://www.bwater.com/Uploads/FileManager/Principles/Bridgewater-Associates-Ray-Dalio-Principles.pdf

TSLA

I have been following Tesla for a while now, trying to justify the price and work on some assumptions of the future. So what I did last night was examine other auto maufacturers market cap, worldwide market share, and then come up with possible justified market cap if TSLA produces enough vehicles to match prior production at their NUMMI plant. This would equate to 1% of world production at 450,000 vehicles a year. The table here (might have to click on the image for larger) compares three large companies and figures out what TSLA market cap would be. For example, Ford has 46.9B in sales and has 18.4% of market share would suggest that 1% of market share could justify future cap of (46.9B/18.4) 2.6B. The comparitive cap shows in the 4th column.

My discussion
This does not account for non auto sales such as drivetrains to Daimler and Toyoda
This does not account for likely higher margins on early TSLA models
This might not be a good way to determine value, but it does suggest they have a ways to go to justify current price compared to GM and F but could grow 3-4 x to equal TM.

I'd like educated feedback on TSLA, my attempt at price justification.
Thank you.