The Future Fund LLC Managing Partner Gary Black on Sunday urged investors to do their own research instead of relying on comments from company management before making investment decisions.
What Happened: The Achilles heel of many smart investors is they accept what company managements tell them rather than do their own independent research. Black said in a post on X, particularly referring to Tesla Inc. (NASDAQ:TSLA) investors. "As a former Fortune 1000 CEO and public company board member, I can say with some authority that CEOs are paid to be optimistic, which many investors misinterpret as bullishness."
Black said that he had made the mistake of listening to company management on guidance and timelines before that turned out incorrect. He further urged investors to talk to customers, competitors, and suppliers in addition to the management and do their own research before making investment decisions.
— Gary Black (@garyblack00) December 29, 2024
The Achilles heel of many smart investors is they accept what company managements tell them rather than do their own independent research. It's not about putting numbers into spreadsheets, as some investors poke fun at those of us who do their own research. I can tell you many...
Why It Matters: Black is a Tesla bull himself. Tesla holds the third position in The Future Fund Active ETF after Nvidia and Alphabet Inc.
Black said in another post on X on Sunday that The Future Fund is not making Tesla a bigger bet given the risks involved of the incoming Trump administration scrapping or reducing the $7500 tax credit currently available on the purchase of electric vehicles in addition to the risk of the EV company not launching a cheaper, more compact electric vehicle model the next year.
According to Black, Tesla launching a compact cheaper EV offering is necessary for the company to expand its total addressable market in 2025. A lower-priced Model 3, as per Black, will not aid delivery volume growth or earnings growth next year.
When I ask an investor what their upside/downside on a stock they own is, and the downside is multiples above the current stock price, I know the investor is not serious. An upside/downside ratio can be probability-weighted, but can't just have upside scenarios. That's... pic.twitter.com/aqGKYufmvt
— Gary Black (@garyblack00) December 29, 2024
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