Financial Literacy

Why do we need Financial Therapy? To make up for the lack of Financial Literacy!

Why Financial Literacy Is So Important

Few are prepared as financial decision-making grows more complex

https://www.investopedia.com/articles/investing/100615/why-f…

Financial literacy is the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. Raising interest in personal finance is now a focus of state-run programs in countries including Australia, Canada, Japan, the United States, and the United Kingdom.[1][2] Understanding basic financial concepts allows people to know how to navigate in the financial system. People with appropriate financial literacy training make better financial decisions and manage money better than those without such training.[3]

https://en.wikipedia.org/wiki/Financial_literacy


The way to deal with complexity is to simplify! Instead of getting engrossed in trivia, i.e. avoid the noise. Last night I needed a sleeping pill so I tuned in to a market analysis video and promptly fell asleep. After a good night’s sleep I decided to hear/watch the rest of it.

33:32 minutes of Market Noise! It’s not a waste of time, it teaches one what to AVOID!!! Notice the long list of promotions. I can’t blame the fellow, that’s how he makes his living. But I can blame myself if I pay any attention to the noise.

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We look at the S&P500, Nasdaq(QQQ), Bitcoin, USDX, Silver, Gold, Russell 2000, and TSLA, AMZN from a technical analysis perspective to try and make some sense of what’s exactly going on.

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https://www.youtube.com/watch?v=WA5qJuF5Q4M


SA is a great source of market noise but kind of interesting to scan. Today I came across a partially literate Tesla Bull/Bear – bull on the product,

Nobody is predicting that TESLA company will collapse. I think almost everyone would agree that it is not only here to stay but be a successful and important part of the auto industry.

bear on the share price,

The problem is with the stock price. It has gone up too much due to irrational, cult-like following. (People attributing divine powers to Musk and expecting him to cause better miracles than Jesus.)

This is a fellow worth illuminating because he sees the reality of Main Street but fails to see the reality of Wall Street. He is not Financially Literate!

Simplifying, Main Street is the driver and Wall Street is the follower. Wall Street trivia is mostly noise and that includes Fed speeches and minutes, economic reports, charting, expert interviews, and all the trivia the above uTube video tells you to pay attention to. There is a tiny bit of wheat in all that chaff but that is a subject for another rant.

Main Street is the driver, what do people want to buy and can afford to pay for? Figure that out and and you’ll know what stocks to buy, hold, and love! Like the fellow above said:

Nobody is predicting that TESLA company will collapse. I think almost everyone would agree that it is not only here to stay but be a successful and important part of the auto industry.

Now justify the price! My response to this Bull/Bear:

@arunmaheshwari44 "There is a difference between collapse of the company versus its stock price. Nobody is predicting that TESLA company will collapse. I think almost everyone would agree that it is not only here to stay but be a successful and important part of the auto industry."

Good observation.

"The problem is with the stock price. It has gone up too much due to irrational, cult-like following. (People attributing divine powers to Musk and expecting him to cause better miracles than Jesus.)"

On the other hand this observation shows a lack of knowledge about the nature of growth. I happen to be a former Elon Skeptic turned Elon Admirer and the turn was not caused by any divine miracle but by the car market’s response to Tesla EVs – from zero to leading brand as you above confirm. Growth has a known progression pattern, the Sigmoid or “S” curve, do study it. https://www.google.com/search?q=the+Sigmoid+or+%22S%22+curve…

During the fast growth phase the traditional valuation metrics don’t apply. I agree with you that in time they will. As with AAPL, the stock’s traditional metrics will be recovered as the growth curve approaches the top of the “S.” For Tesla EVs that might be some 5 to 8 years in the future. Notice I state “for Tesla EVs.” The reason is that unless Tesla is a one trick pony there will be further growth spurts driven by other Tesla products, could be FSD, Tesla storage, solar roofs, Tesla robots, robo taxis, Dojo, or some other initiative. This kind of development is quite visible on Apple’s chart, iPod, iPad, iPhone, iWatch, iWhatever. If this turns out to be true for Tesla then the stock price will remain “irrational” for longer than 5 to 8 years.

Were you to shift your investing focus away from Wall Street buying Tesla shares to Main Street buying Tesla products you are likely to join the rank of the Tesla bulls.

https://seekingalpha.com/article/4533191-tesla-is-past-its-s…

The Captain
holy guacamole! My stocks are down pre market!!! The end of the world??? LOL

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