Thanks to Tesla’s addition into the S&P 500 scheduled to take place on December 21st, investors are throwing all of their money at this electric vehicle stock. In yesterday’s trading session, Tesla shares reached a new all-time high of $508.61 before closing out at $499.27 (still an impressive 2.6% gain, nonetheless).
But all of that hype and excitement could quickly die down in the face of non-profit Consumer Reports releasing their 2020 Vehicle Reliability Study.
Because in this new report, Tesla is the second lowest-ranking car brand out of a total of 26. This report is very highly regarded, as it surveys the owners of over 300,000 vehicles and is relied upon as an industry-standard rating system.
In their eyes, the Tesla Model S and Model Y have declined in their reliability, thus decreasing the willingness of Consumer Reports to recommend these cars to their readers.
Common complaints included hardware and paint problems, suspension issues, finding hair in the paint of a brand-new car, and overall poor functionality when it comes to both vehicle’s electronics.
This quote from Jake Fisher, Senior Director of Automotive Testing, was quite damning:
“What we’re seeing is a lot of poorly fitting body panels, paint issues… Specifically we’ve had Tesla Model Y owners tell us the rear hatch fits so poorly they can’t even close it. The paint issues have been everything from mismatched paint to one owner explaining there was actually human hair in paint when they had it delivered.”
Quite the fall for the Model S, considering that just five years ago it was rated as the #1 vehicle by Consumer Reports. In the 2020 report, the Model 3 was the only Tesla vehicle that was deemed reliable enough for recommending.
Sadly, this rating was inevitable. Several high-profile car reviewers and dealerships have noted numerous problems with the Tesla vehicles over the past few years.
Even Kelly Blue Book had some unkind words for the Model Y a few months ago:
“As for quality issues. Our car’s b-pillar trim doesn’t fit right and neither does this lower bumper trim, the rear door alignment is slightly off, the rear seats are similarly uneven, and there’s a loud rattle coming from the rear somewhere.”
Not the type of news you want to hear the day after you have your inclusion into the S&P 500 officially announced!
If Tesla wants to maintain its position in the most prestigious stock market index of all time, they’ll have to start fixing these issues ASAP. Or face getting replaced by another superstar company eager to get their shares listed on the S&P 500 index.
What do YOU think about this news of Tesla’s vehicles becoming more unreliable? Have you heard other people mentioning severe problems with the Model Y, Model S, or Model 3? Reply to this newsletter and share your observations with us!
Can the S&P 500 Keep Rising for the Rest of 2020?
Between the uncertainty of the 2020 Presidential Election outcome and the growing fears around the exponential rise of COVID-19 cases in America, one has to wonder how the S&P 500 will be affected.
According to Fundstrat Global Advisors founder Thomas Lee, he foresees the S&P 500 index increasing by 7% (from 3,582 to 3,800) by the end of the calendar year.
And to back up his assertion, he listed several factors which would “incentivize” further gains over the next 42 days:
- The news of two COVID-19 vaccines having a 95% effectiveness rate and being mere days away from having the FDA grant them “emergency use approval”
- Politicians are more hesitant to enforce a second lockdown with the same level of restrictiveness as the first lockdowns back in March (i.e. a “soft” lockdown)
- The “fear index” (ticker: VIX), which is currently at ~23, going below 20
- An inevitable arrival of a second round of stimulus funding
- The incoming “Santa Claus rally”, a phenomenon whereby the stock market rallies up in the last trading week of December
Sounds like a decently persuasive case!
What do YOU think about Lee’s predictions for the S&P 500? Can it reach the 3,800 level and break through it by the end of 2020, or will something happen that causes it to plateau or go down? Reply to this newsletter and share your opinions with us!
As of 2030, Gasoline Cars Will No Longer Be Sold in the UK
The United Kingdom is taking on the progressive agenda of clean energy and the subsequent elimination of relying on products powered by diesel and gasoline.
Prime Minister Boris Johnson originally set 2035 as the year where the sale of gas-powered vehicles will be banned nationwide. But in an effort to accelerate progress towards the desired end-stage, he has now set back the deadline to 2030.
This initiative is just a small part of his even-larger initiative to spark a “green revolution”: Creating 250,000 new jobs by investing $16 billion towards the manufacturing of batteries, electric vehicles, and full-scale charging networks. By 2050, the UK intends to have a net emission of zero.
From his penned article in The Financial Times:
“Now is the time to plan for a green recovery with high-skilled jobs that give people the satisfaction of knowing they are helping to make the country cleaner, greener and more beautiful.”
Seeing as the somewhat long-term future will be all about the rise of electric vehicles, you might as well load your stock portfolio with a few potential winners in this space. It could be the electric vehicle companies themselves, or the companies manufacturing their parts…
Hyatt Hotels Reserves 60 Properties Worldwide for Helping Small Businesses
Hyatt Hotels appears to have reached a win-win scenario: They help struggling small businesses get set up to operate in their hotels, and in exchange they get more exposure (and hopefully some actual business for themselves).
Spanning 60 properties worldwide, this initiative has offered various services that include:
- Lending their kitchens to restaurants
- Reserving space for local musicians to perform
- Allowing barbershops to use their rooftop spaces
- Hosting local artisans who normally have their markets on the streets
- Offering free exhibit space for museums
- Providing socially distanced fitness classes in partnership with health instructors
I wasn’t able to locate any information about intimate details regarding these deals. So I have no clue how much these businesses are paying Hyatt, or being paid by Hyatt, to make these collaborations happen.
But at the very least, it’s an effective way for hotels to fill up the space once occupied by travelers and busy business executives.
Four Potential Taxes That Remote Workers May Have to Pay in 2021
Charles Schwab writer Hayden Adams recently penned an article about the potential taxes faced by individuals who now make a full-time living while working from home. Whether you employ remote workers or are a remote worker yourself, all of the money you save in expenses could easily be erased by additional taxes.
Here are the four tax issues that Adams believes are worth your attention…
Business expenses: Unless you pay for an expense out of pocket while working remotely and have your employer reimburse it, that expense does not quality as a tax deduction.
Multi-state employee registration: In addition to registering your business in the state you live in, you must also register it in the states of all your employees. Yes, this also means fulfilling your tax obligations in those respective states as well (i.e. filing tax returns and paying the appropriate state taxes).
Working in more than one state: If you work in more than one state an earn an income, you have to file tax returns for each INDIVIDUAL state (whether staying there for a few months, or attending a business trip for a few days). The exception to this rule are states which do not impose an income tax.
Withholding taxes: Employers are legally required to withhold taxes from the wages of employees who are not residents in their state (there are some states which are exceptions to this rule).
Do with this information what you will!
Buzzfeed Now Has Full Ownership of HuffPost
This year, we’ve witnessed the failure of numerous media outlets who have laid off thousands of employees due to their mediocre performance. People aren’t visiting their website as often, and the ads posted on their site just aren’t delivering results like they used to.
One of such failing outlets is HuffPost, which was formerly owned by telecommunications company Verizon. But due to its reputation as a very left-leaning outlet, combined with numerous journalistic malpractices and unreasonably low salaries for full-time writers, absolutely nobody wanted them.
The only way for them to cleanse their hands of HuffPost was to sell it to a similar outlet, and Buzzfeed was the buyer.
According to ZeroHedge, here are the details of the deal:
“Buzzfeed will assume ownership and control of HuffPost in an all-stock deal, and in return, Verizon will make a small cash investment in Buzzfeed, and establish a strategic partnership. Under the pact, the companies will syndicate content on each others’ websites, and explore opportunities to jointly sell advertising.”
Two peas in a pod made for each other! Hopefully, they can learn from their past mistakes and write content that doesn’t bore people to tears…