Tesla, the electric car, battery, and solar roof company, is up over 300% this year. Their recently disclosed plans to build a new car factory in the Austin area has raised our clients’ interest in Elon Musk’s little spark car venture even further. Just this week, after announcing a 5 for 1 stock split, the stock has gone up over 20% through yesterday’s close. If you are wondering why you didn’t buy some of that before it took off, you’re probably not alone. For value investors, the room for second guessing has gotten quite crowded.
Q2 2020 Market Review
After the pandemic driven rout of equities in Q1, stocks and bonds staged an impressive recovery in Q2 as central banks and governments fired up the printing presses and economies started to reopen. As people started venturing out from the Covid lockdown, economic data has indicated a sharp rebound. Statistics such as US retail sales rose 17% month on month in May, and weekly claims for unemployment insurance slowed substantially from April to May.
While the US economy officially entered a recession during Q1, fears of a worst case scenario of the Covid crisis morphing from a toilet paper run into a bank run have apparently been avoided.