Tracking Tesla Transports
Plus, the market melt-up, QXO, OKLO, AUR
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Greetings Everybody...
Every few months my wife and I drive from San Diego to San Francisco to see our grandkids. We’re on our fifth year of doing this trip – the second time this year. And we always drive, which we started during Covid when our first grandson was born. Unless weather forces us to take a different route, it’s always the same: Up the 5 and over The Grapevine... We do this at least quarterly, and every drive is different... given the lighting, the sun, the clouds, the fog, the fires, the rain and even the snow. But the four-hour flat straightaway through the agricultural vines, fruit and nut trees of the Central Valley is also almost always the most peaceful and predictable.
One thing that never changes... On the stretch between LA and the Gilroy cutoff are the car carriers heading south, hauling Teslas. No idea where they’re headed. Gilroy, A.K.A the garlic capital of the world, is south of Tesla’s Fremont factory. During the post-Covid Tesla boom, I would lose count of how many Tesla car carriers I saw, with one full truck after another. Day of the week didn’t matter. Over time the number of trucks I saw going to and from the Bay Area, while not perfect, became a pretty good indicator of the current quarter’s production and shipments. During our latest northbound drive a few days ago, I counted five, maybe six. All missing a car. I’ll be doing it again – in reverse – in 10 days, and will report back. Happy trails...
Meanwhile, the market’s latest melt-up continues... And I continue to say too far too fast – especially with my red-flagged names. Then again, one thing that will never change, but maybe only accelerate in velocity: The market can remain irrational longer than anybody trying to look at it rationally can remain sane. You can see it in real-time with the performance of my Red Flag Alert Focus List of 17 names. While it’s still double-digit negative (albeit barely!), it has improved by more than two-thirds from the market’s depth in early April, when things swung too far too fast the other way. Right now the disconnect from fundamentals for many of these is just as extreme. But, hey, FOMO/YOLO. Live by the squeeze, die by the squeeze. Same as it ever was... (Attention premium subscribers: If you’re reading this make sure to check your email for a special version of this post, which includes the full updated Focus List, along with details. If you didn’t receive it, let me know.)
No surprise, given the nature of this market, the Hostile React-O-Meter™ continues to spin on my QXO report – mostly, it seems, from folks who read the free preview and not the entire paywalled report. And mostly with the same message: Never bet against the jockey, in this case, QXO’s legendary CEO, Brad Jacobs. But just a reminder: The thesis I wrote involved a short-term catalyst that is still a month or two away from occurring, assuming it ever does...
As for never betting against the jockey, that’s what they said when Mary Dillon, fresh from her hit performance at Ulta Beauty, took over flailing Foot Locker. If there is any moral to the story of the recent merger announcement of Dick’s agreeing to acquire Foot Locker, it’s that sometimes even good jockeys lose. In fact, they do most of the time, winning just 15%-20% of all races. More is rare. (Tip-o-the-hat to Bob Howard of the Positive Patterns stock newsletter, one of my go-to’s for all things ponies, for that last link.)
Then there’s Oklo (yes, again!), the nuclear reactor stock, which like so many of the diciest companies in its space are up on what surely will go down as the latest historic short squeeze – until the next one. The lunacy of it can be summed up in this one month chart comparing Oklo with the VanEck Uranium and Nuclear ETF...
If that’s not a reality check, then we’re living on different planets.
Finally, if you missed it... check out this report from my friends at Bleecker Street Research on Aurora Innovations, which has been on the verge of a commercial rollout of its autonomous trucks for several years. Last I looked, it was supposed to be in 2023, but like all of the autonomous trucking/air taxi companies launched by way of a SPAC during peak SPAC silliness, deadlines were meant to be broken. This report tells quite the tale, and is all too reminiscent to me of the hottest of the hot autonomous trucking companies of the day – TuSimple, which was simply too good to be true. The difference is that TuSimple went public the old-fashioned way, via a real IPO, which gave it street cred until it turned into street crud and is now an asterisk in the annals of Wall Street’s wackier moments. Which gets me back to my drive on the 5... I know that we humans aren’t supposedly as safe as the combo of computers, cameras and radar, but driverless semis in the fog or rain up and over the Grapevine or the Altamont Pass? It’s treacherous enough on a clear day... when you can see forever.
DISCLAIMER: This is solely my opinion based on my observations and interpretations of events, based on published facts and filings, and should not be construed as personal investment advice. (Because it isn’t!) I own NLR. I’m under no obligation to update or alert subscribers if and when I make changes to any of my holdings.
Feel free to contact me at herb@herbgreenberg.com.