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The stock market indices started the week in the red over inflation and global shortage worries.
All three indices finished Monday in the red. Despite a rally towards the end of the day, none of the indices managed to finish the day in the green.
There isn't any new economic indicator to discuss. Just the same inflation fears we have been discussing for a while continue to spread as the world's economy grapples with widespread shortages across commodities and supplies. Several businesses are double and triple ordering the things they need, which further boosts the prices.
I can see two implications:
Raven Industries (RAVN) is poised to hit a new record high.
On to the winner stock of the day, shares of Raven Industries (RAVN) were up more than 9%. With this jump, the stock is back to its 52-week high and has recovered all the losses it had experienced in the last few weeks. I invested in Raven because of the work it's doing in shaping the future of agriculture machinery and autonomous robots that would enable farms worldwide to run more efficiently. My strategy is relatively long-term here.
However, it doesn't hurt to see that its short-term performance is quite impressive too. The company reported its latest quarterly earnings. Revenue was up 30%, and earnings per share were up by 136%.
Watch this company for your long-term portfolio, especially if it goes through another dip due to general market conditions.
Is it time to sell your Tesla (TSLA) shares?
Shares of Tesla (TSLA) continued to slide down. On the one hand, Bitcoin investors hate Elon Musk and Tesla for abandoning their plan to accept Bitcoin as a form of currency to pay for Tesla cars and consecutively crashing Bitcoin's price.
On the other hand, the news broke that Dr. Michael Burry, the man who predicted and profited from the 2008 mortgage-backed securities crisis, has shorted Tesla's stock by holding Put options that would profit if the company's shares drop. Dr. Burry is famed for his courageous and fact-based analyses, and his decision to short stock has the power to cast doubt in investors' minds.
What should we do if we own Tesla shares?
I own a few shares like many of you. The decision whether to sell Tesla now depends on your original reasons to invest in Tesla. My reason for investing in the company is that I appreciate its mission. I believe Tesla's brand and Elon Musk's ability to maintain momentum and raise capital are valid enough to justify my small investment.
Dr. Barry's reasons to short Tesla are valid too. He argues all of Tesla's profit comes from selling regulatory credits to other companies who want to offset their carbon footprint and not selling cars.
He is quite right, but also, that's precisely why I invest in Tesla. The company has managed to find creative ways to stay afloat. I think the risk is justified, primarily because of the small amount of money I have in this stock. If you are owning some Tesla shares, go back to your original reasons for investing. Are they still valid?
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