Usually, there are one or two big themes in our feedback inbox each week. Gold… socialism… cryptocurrencies… There’s always something that stands out.
But this week, the most popular item wasn’t a topic at all. It was a man – Jeff Brown (The Near Future Report and Exponential Tech Investor).
Before we get to that, though, we’ve got something you’re going to want to see…
Our team over at Palm Beach Research Group put together a free, online Position Size Calculator.
It’s designed to help you figure out how many shares you should buy each time you open a new position in your investment portfolio.
You can find it – along with five other free investing calculators from the Palm Beach team – right here.
Now, for Jeff Brown…
First up, Jeff fields a question about Facebook Coin.
(Note: If you’re wondering what the heck Facebook Coin is, catch up with our previous essays here, here, and here.)
Reader question: Would Facebook Coin be a coin we should eventually invest in, since it will be a very, very popular currency with so many millions buying into it?
Thank you for your informative articles. I always walk away with new insights to old ideas.
– Anonymous
Jeff’s answer: No, we shouldn’t look at Facebook Coin as an investment opportunity.
We know that Facebook will be linking the Facebook Coin to some form of “stable” asset. This will most likely be a link to the U.S. dollar. We would call this a stablecoin, which would most likely have a 1:1 peg to the dollar.
Therefore, the Facebook Coin would essentially be a digital version of U.S. currency – simple to use and simple to understand because the denominations would be the same. The coin would be convertible into U.S. dollars if desired through a digital asset exchange.
We can think of it as a way for Facebook to easily facilitate economic transactions over its entire platform of services.
Next up… a confused reader wants to understand why Jeff is so bullish about one of the most hated stocks of all time – Tesla (TSLA).
Reader question: I have been a subscriber of The Near Future Report for over a year and follow Jeff Brown’s advice on many of his stock suggestions. I am a little puzzled at why Jeff is strongly recommending the purchase of Tesla stock in his portfolio, while I am regularly reading about the imminent demise of Tesla as a company.
– Murray F. (Legacy Research member)
Jeff’s answer: Here’s the thing… Tesla isn’t struggling, as some have suggested… the company is now gushing free cash flow.
In fact, Tesla will generate more than $800 million in free cash flow this year. And it will eclipse $2 billion in free cash flow in 2020. When that happens, the stock will be trading at levels that make $300 per share look dirt cheap.
That’s why we invested in Tesla in The Near Future Report back in December. There’s so much more to this company than the analysts on Wall Street and the talking heads on TV understand.
I’m not interested in Tesla as a carmaker. I like Tesla for its superiority in artificial intelligence (AI), autonomous driving, and even battery technology.
So please, do not let the bears fool you. TSLA will be trading between $450 and $600 within the next 18 months…
It’s not just Tesla that’s bringing out the doubters. Some readers are calling B.S. on the whole electric vehicle (EV) revolution…
Reader question: Just where do they plan on charging those EV car batteries? If people drive to work, will the company be required to have charging stations? Who will pay for the installation of these hundreds of outlets to charge all the cars?
With an electric car, you can’t pull up to a station and in 10 to 15 minutes have your tank topped off, use the restroom, grab some snacks, and be happily back on the road. Which consumer is going to wait even for the fast charge of an hour to top off the batteries?
– Ken W.
Jeff’s answer: Lots of good questions here, so let’s take them one at a time…
First, EV giant Tesla has already built 1,441 supercharger stations containing 12,888 superchargers around the world, with more than one-third of these in North America (U.S./Canada/Mexico). And the company is installing about 275 supercharger stations each year – many of those with more than 20 superchargers per station.
And it’s not just Tesla, several other companies maintain EV charging stations throughout North America. Of those, the most prominent are Blink Charging, ChargePoint, and SemaConnect.
Adding them all together, there are more than 22,500 EV charging stations, and that doesn’t include smaller stations at municipal locations, or corporate offices, etc.
Compare that with the roughly 100,000-plus gas stations around the U.S. today. EV charging stations have reached almost 25% of the number of gas stations in the U.S. and the infrastructure is increasing daily.
Second, right now, Tesla’s superchargers can charge EVs in roughly 45-50 minutes. However, Tesla is breaking ground on the first V3 supercharger site next month, which will cut charge times down to about 15 minutes per EV. Tesla will ramp up V3 supercharger installations throughout 2019.
But the reality is most drivers don’t need to worry about charging up at a station. The average driver in the U.S. only drives 37 miles per day, according to the U.S. Department of Transportation.
Given that the average range for the top 10 EVs on the market is 232 miles, the average person would only need to charge their EV once every six days. There is more than enough “juice” in the batteries to take care of a day’s driving and plug the car in at night to top off the batteries without ever having to worry about finding a charging station.
And, finally, consumers might be surprised by the economics of EV charging…
Charging costs vary slightly by location, but the average cost in the U.S. is $0.28 per kilowatt hour (kWh). And the average cost of charging at home is only $0.12 per kWh.
That means the cost to charge an EV for 300 miles is about $25 at a station or $12 at home. Compare that to about $41 to drive an average internal combustion engine car (assuming 28 MPG and a gas price of $2.85 per gallon).
That’s a savings of between 39% and 71%.
The shift to EVs is really just the first phase of a much larger automotive revolution Jeff is predicting…
And it all depends on one crucial piece of technology that Jeff is already calling the No. 1 tech investment of 2019.
Moving on… With April 15 drawing near, we’ll close this week’s mailbag with a question about taxes… and an answer from our resident CPA here at Legacy Research, Nick Rokke (Palm Beach Daily).
Reader question: I believe I remember reading in one of your articles that if you make money on your investments that you have to pay taxes on the gains. Question for this year is: If I lost money on my investments, can I claim the losses on my taxes for the year?
– Shane L. (Legacy Research member)
Nick’s answer: Every time you sell an investment, there’s a tax consequence.
If you have a gain, you owe money. If you have a loss, you might be able to write those losses off. And you can use the offsetting losses to your benefit.
We call this “tax loss harvesting.” And it can help you instantly recoup a portion of your biggest losses.
Here’s an example…
Let’s say you made $10,000 in your trading account this year. You could owe up to $3,960 in taxes.
Now, let’s say you have a position showing a $5,000 loss. If you book that loss now, it lowers your overall gain from $10,000 to $5,000. That means the tax bill on those gains also gets cut in half.
So now, instead of $3,960, you’d only owe the feds $1,980.
That’s almost two grand going back into your pocket.
To figure out if you have any losses to harvest, follow these steps (they should take less than an hour):
Go to your brokerage account.
Find the “History and Statements” section.
Click on the “Realized Gain/Loss” report.
If you made a lot of gains, sell some losers.
For more information, you can read this article from Fidelity to help manage taxes on your investment gains.
Remember, tax laws are always changing… And the tax code is very complicated. If you’re still uncertain about your taxes, you should consult a qualified tax preparer.
The thousands you can save make your tax accountant worth the expense.
If you’re uncomfortable with the thought of closing those negative positions in your portfolio, make sure you read “Why You Should Sell Your Losing Stocks Today.” In this essay, Nick shows why hanging onto dogs is a surefire way to wreck your portfolio.
That’s all for today. Have a nice weekend.
Regards,
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James Wells
Director
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