The Practical Islamic Finance Podcast
The Practical Islamic Finance Podcast
Bitcoin and Tesla Just Getting Started
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Bitcoin and Tesla Just Getting Started
In this episode, we will cover:
- Market Overview: Tesla & Bitcoin Surge
- Tesla Price Target Raised to $350 by Bank of America
- Full Self-Driving (FSD) & Tesla’s Advantage with New Congress
- Bitcoin Stock-to-Flow Model and Long-Term Price Target
- Market Reactions: Crypto-Friendly Regulations
- Tom Lee Interview Recap: Small Caps & Bitcoin Outlook
- Relative Strength Index (RSI) Signals for Bitcoin
- Tesla and Bitcoin Predictions for Year-End
- Closing Remarks: Membership and Community Q&A
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salam@practicalislamicfinance.com
ABOUT OUR PODCAST
Our podcast is about helping people ethically build wealth. We cover a broad range of topics including stock and crypto investing, product reviews, and general financial well-being.
DISCLAIMER
Anything you hear in this video is an opinion. It is not personalized financial advice. Make sure you do your due diligence before making any investment decisions.
Yet another monster day for Tesla today. We reached a high of three twenty five back at three eighteen right now. We'll talk about the prospects for Tesla and Bitcoin and just the markets in general in this live. Go ahead and leave a like if you enjoy these lives. And Assalamualaikum today is Friday, November eighth. Tesla, as we mentioned, three eighteen Bitcoin is at seventy six seven. It was at seventy seven thousand earlier. And Dogecoin is right under twenty cents. Perhaps we'll see the next leg up here for that token. Sol is around two hundred. It's going to tap on that two hundred ceiling a couple of times before it breaks through, inshallah. The indices today, even though they started in the red, are now solidly in the green. And BitDeer is up one point one two percent. Assalamualaikum, Rashad. Nice to see you. Let's talk about Tesla stock for a second. So Tesla is at three, as I've mentioned, but if you look at, if you zoom out a bit, look at where it peaked last cycle at four or seven, I think we're gonna get to that number and beyond in this cycle. So there's still, I think upside left for this stock, even in the near term, in the next few months, let's say. Something to note here is that Tesla has been lagging the S&P for the last year. And I did get some heat about having Tesla as the biggest position in our growth portfolio during this period. But I know that these things can change very quickly. And indeed, this is exactly what happened. So whereas Tesla has been lagging the S&P for the last year in terms of performance, Now, our portfolio still managed to beat the S&P during this time, but our biggest position was lagging the S&P. All of a sudden now, if you look at the last one year performance, Tesla is at fifty one percent versus the S&P at thirty seven percent. So When you have high conviction in something, you have to exercise patience. Otherwise, you won't see your conviction manifest into returns. And you'll be kicking yourself when it does and saying, I knew better than that. to not allocate sufficiently to that particular position. I knew it was going up. I should have had more patience. So alhamdulillah, this is a lesson in patience that I hope all benefit from. Now, in terms of why it was up today, one of the reasons why it is up, and there are a lot, but one of the reasons is Bank of America has raised their price target for Tesla stock around thirty two percent. So They've adjusted their price target for Tesla shares from two sixty five to three fifty per share. The firm also maintained its buy rating for the electric vehicle maker. They said in the note to clients, our analysis has shown that Tesla should be relatively indifferent directly to most policies discussed in our recent election note, but may benefit from a shift to federal regulation of autonomous vehicles, full self-driving nationwide. So they're gonna benefit from having a friendly White House and Senate and House. that can increase the probabilities of favorable regulation as it relates to rolling out their FST, which they have mentioned, Elon Musk mentioned in the recent Robotaxi event, they plan on doing for Tesla vehicles starting in the states of Texas and California as early as next year in twenty twenty five. So the regulations are extremely important and really rolling this out was a matter of regulation and it does seem that they're going to have a legislator that is much more friendly towards tesla and not only that but perhaps paradoxically the rolling back or anticipated rolling back of some of the benefits that were given to electric vehicle makers in a Trump administration may benefit Tesla in that other EV makers may decide it's not worth pursuing the EV opportunity absent these credits that we were getting. Maybe we should go back to making hybrids and ICE vehicles And that will further solidify Tesla's dominant position and its market share in the EV market. So paradoxically, the rolling back of some of the incentives to electric vehicle makers will benefit Tesla all in all. Now looking to Bitcoin, if we look at our stock to income model, one of my favorite favorite models to look at, if you're wondering whether there's still upside here in terms of where it should be versus where it is, as we mentioned, it's close to seventy seven thousand based on this model. The projected price for Bitcoin is around ninety five thousand and we should plateau in this having we should plateau around the two hundred and eighty four thousand dollar mark. Now, there is some standard deviation here where the lower band is at one forty two. The higher band is five sixty seven. But I do think that this price target is quite reasonable. And when you look at previous cycles and how this model has performed in terms of determining the ballpark for the price of Bitcoin, it has performed rather well. You can see the price here is in green and the prediction that the model gives is in that off-white color. Now, as it relates to sort of the near term technicals in terms of the relative strength index for Bitcoin, we're now at seventy. But keep in mind, we are in the bull market phase of Bitcoin. I think what happened earlier in the year Perhaps it was motivated by the Bitcoin ETFs. And that sort of caused a head fake for investors where they thought, OK, maybe this is the start. But I think now is the actual bull market for Bitcoin or perhaps phase two, the bull more profitable and dramatic phase is what we are in right now so this is the real deal in my assessment and when you look at previous uh local highs for bitcoin and where the rsi peak if you go back to march the rsi peak close to at uh basically uh if you look at uh previous cycle april twenty twenty one The RSI peaked at ninety. The one before that, the RSI peaked at ninety six. So between seventy and where we are expected to peak, there's still some room to run here. Assalamu alaikum, chocolate. Nice to see you. Now, today we did get some on CNBC. I caught an interview with Tom Lee. He's someone that I respect in terms of his commentary on markets. He's had some good calls in the past. So what I'd like to do is listen in on what he had to say, and I'll give you my commentary on that. So. Sir, at Fundstrat Capital, and the list goes on and on. And he's a CNBC contributor. First post-election appearance that we've had. You knew Trump was going to win. Not many people did. Yes. I'll give you credit. Are you saying you didn't? Maybe you didn't say. Well, that's not true. I don't think not many people did. I think the mainstream media gave the impression. that Kamala had more of a shot than she did. But if you were actually following betting markets, you were following trends on social media, you knew that the probability for a Trump win was higher. So not really sure it was that much of a surprise. Say it in so many words, but you said it. Yes, I'd say that we were placing a lot more weight on what the betting markets were pointing to. And so, and we... you know when we look at all the deltas that's and you saw it in the trump trade and you saw it in bitcoin correct and you saw it in sectors of the market that would benefit from that's right presumably who but who knows uh from a from a trump presidency so fifteen hundred points a meet out of the gate more to come or have we already we're already there I think we need to respect this move. I mean, it was a tremendous rally post election and it continued yesterday. I think it really does reflect a lot of money was taken out of the market because of the uncertainty around the election. And now we know that because of policy changes and animal spirits that this is really going to benefit things like Bitcoin and small caps and regional banks and financials. So I do think there's still a lot of upside. I mean, small caps trade at ten times median forward earnings. I mean, that's a. So what do you think that should be? Twelve times? What's the what's the opportunity set in your mind? Well, since nineteen eighty seven small caps traded on a median basis at a premium to the S&P. The S&P is at seventeen times. So I think small caps could in the next couple of years outperform by more than one hundred percent. This is very important. It's also data backed in terms of his prediction for small caps. When you look at the multiples, small caps have traded at a premium, but now they're at a discount. So So there may be a reversion to the mean in the next few months. Sorry, never eat peanuts before you go live. So, yeah, so I think broadly speaking, there's going to be a rotation from, you know, less aggressive picks to more aggressive picks. And that often translates into smaller cap companies, which is good for halal conscious investors, because typically speaking, halal conscious investors, companies or things that fit with halal conscious criteria tend to skew towards these smaller cap names because they tend to be pure play names, whereas larger cap names tend to have their hands in a lot of different businesses, and sometimes that causes them to run afoul of some of the things that we look for. And what do you think about some of the macro issues that I think create a different level of uncertainty? We keep talking about the bond market and what that might be saying, what you think is happening with gold, Are the bond vigilantes going to be this governor on whatever you think is going to happen in Washington? This is important to mention. So gold has continued to perform like a risk-off asset. Whereas Bitcoin continues to perform as a risk-on asset. So if we go into a part of the cycle where people are going risk-on, you may see the outperformance of Bitcoin versus gold get even more exaggerated. As James Carville famously said, you know, the bond market is everyone's scared of the bond market. So that is something we need to watch. But we've had plenty of periods where stocks have risen with bonds rising. And I kind of agree with Powell's assessment that it's not the yields have gone up, not because of inflation, but because there's sort of a change in growth expectations. I thought that a sweep was possible. for either party was the death knell for the markets and frightening to all involved. And now we're getting a sweep. Why isn't it more frightening? Maybe the sweep the other way would have been a little more frightening to some. Yeah. I mean, I think part of the reason investors are getting somewhat optimistic is that President Trump is entering office again, but this time with a lot more knowledge of how to build a cabinet and a team. And so in some ways, this would end up being more market friendly. And I think that's why investors are becoming optimistic. I mean, I kind of agree with the idea that there are animal spirits growing. He'll never be deficit friendly, will he? I mean, he will be deficit friendly. He won't be. If we cut taxes on tips, social security, overtime, Remove the salt cap. Extend the tax cuts. If you do all those things, that seems like... It's going to be very difficult to fix the deficit with... It may not fix the deficit that is reducing taxes, but it will increase productivity because you're essentially taking money from the least efficient component in the country's economy, which is the government. And keeping that money or taking it away from the government and keeping it with the most efficient components of any economy, which is private industry. just changes in taxes and spending. But it's probably why Bitcoin is kind of interesting here because it's potentially a treasury reserve asset. And if Bitcoin rises in price, it actually helps offset the liabilities, which is the deficit. So you were at one fifty, I think, on Bitcoin, weren't you? this would be really huge. If the crypto reserve is actually implemented, I cannot emphasize for the United States, I cannot emphasize how big of a deal this is. This would be huge and other countries would soon follow. Not necessarily by the end of this year? I think six figures is still possible before the end of the year, yeah. And then more next year and the year after? Yeah, I think because now post-halving and Now, Bitcoin's becoming a lot more relevant, and I think maybe the regulatory overhang is diminishing, that there's a lot of upside from here, yes. ED HARRISON Okay, S&P, end of next year? MICHAEL GREENSTONE Well, between now and year end, five to ten percent is probably the base case, just because that's the type of rally post-election, and we have a dovish Fed and the normal seasonals. ED HARRISON Is that the right move right now for the Fed? So five to ten percent in the next basically month and a half is the average as per Tom Lee. I haven't verified this as for Tom Lee for the post-election rally. That's very significant for an entire index. I think inflation fighting. uh war is largely over and you know the real rate is still too high so I agree with fed's view that we need to move towards neutral which you know which is towards three percent so I think it is supportive of markets and So three percent as a target would mean and basically all commenters I've heard suggested that that was sort of the neutral target for interest rates. So that suggests twenty five base points probably in December and another one hundred base points next year. So a lot of easing left. And you saw how the market reacted to Jerome Powell's easing yesterday, even though it was expected. So I think that these are catalysts yet on the horizon. You know, business investment has been constrained. So I think these things are positive. So what about two thousand? What's next year? Is that twenty five? They move so fast. They're like months now. The years. So what about twenty twenty five? So. Five to ten percent more would put us well above. Yeah, more than six thousand before year end. I think at least for the foreseeable future. No recession. No recession. And people want you to answer when I ask you a question. So what do you say? Sixty what hundred on the S&P? I think well past like sixty seven hundred. No. Sometime. Sixty seven hundred. Yeah. Sometime next year because. That's another twenty percent, isn't it? You got to love how animated Joe is. Yeah, it's well, maybe ten, fifteen. Yeah, because, you know, margin debt hasn't really risen in the last four months and the stock market's up. So we know investors haven't been adding risk. That's pretty huge. Margin debt not having risen, which means that there's a lot of firepower that is still on the sidelines here with regards to asset prices. And now we have earnings visibility and we have a continued dovish Fed and then the selections behind us. So multiple tailwinds exist. You're pretty bullish. I think I'm pretty positive on the US and fundamentals. Yes. Yeah, so very bullish from Tom Lee. He has had some very good calls in the past. And to be honest, nothing he has said in that interview strikes me as particularly off the mark. I think generally he's in the right ballpark with what he expects. And so I too remain bullish and I think probably investors will start going down or going higher on the risk spectrum in their investments. And perhaps that means the assets that will do better moving forward are lower on the market cap scale. uh with that being said do leave a like if you benefited or enjoyed uh these lives uh let's go to questions very quickly uh sammy says salam alaikum alaikum salam nice to see you sure tesla can go up higher but seems like a little late to jump on the train well it depends on your investment horizon if your investment horizon is till the end of the year you know maybe there's not much left I I don't think it's out of the cards to be in the by january if I'm being completely honest but um Yeah, maybe it's not the fastest horse right now, but I think that if you have a longer time horizon, you understand the full self-driving opportunity, you understand the robotics opportunity, then this thing can go much, much higher. And it's very rare that I say this, but I actually agree with ARK invests price target for Tesla, which is in the multiple thousands per share. Rakan, I would assume that this is not your first bull run. No, it's not. Does it usually slow down gradually or suddenly? Actually, it's closer to be suddenly than gradually, but oftentimes there is a double top. So if you're able to recognize that double top, that helps. But typically the markets take the stairs on the way up and they take the elevator on the way down. So something to, you should always have an eye on the data and be data driven in your decision making. And hopefully we're doing that on this channel. Do you still see more run in iron? Well, if we get the six figures in Bitcoin, then yeah, by the end of the year, it's very important how quickly Bitcoin appreciates as it relates to Bitcoin miners. So if you think it's going to go to you know, one hundred and fifty. If it gets to one hundred and fifty in six months, then Bitcoin miners might not appreciate that much. But if we get multiple know ten thousand weekly candles then these bitcoin miners are really gonna soar because the bitcoin price is going to outpace the expansion in the hash rate of the bitcoin network by a lot so that's really what matters is that the appreciation and the price of bitcoin has to be quick for the Bitcoin miners to really appreciate. It can't be gradual and slow because then the appreciation or the benefit from it may be eaten up by the expansion in hash rate that Bitcoin miners are constantly achieving. Dr. Boss says, Salam alaikum, alaikum salam. Would deregulation increase liquidity in Trump policy? Should we expect twenty percent gains in S&P in twenty twenty five, as Tom suggests? Well, I think probably for the S&P, ten to fifteen percent. But for the Russell, I think closer to thirty percent. That's my expectation. I own some bitcoin ethan solana and thinking about adding some doge is it too late to do it now no I don't think uh it's too late to do it now sammy not not investment advice this is just what I'm this is just what I do with my own money so Just that's a disclaimer. If you'd like to see our buy below and sell above prices, become a PIF member. You'll see all those buy below and sell above prices on our watch list, which basically tells you based on our assessment, you know, what prices we would buy below, what prices we would start realizing profits. Chocolate says word on the streets. Um, yeah, dams will force Sonia Sotomayor to step down. So Biden could assign a judge before leaving office. I have no idea. And, uh, frankly, it's not that consequential. I don't think Sammy says, sorry, another question. Yeah, of course. Well, PIF members get the signal to know when to exit our crypto holdings. Yeah. That's, that's why we have the PIF membership. That's one of the main benefits. Ask that question on Discord with regards to ETFs for gold. I did go over crypto, what I thought it was. you know, halal or haram in a video on my channel. So just search for that and check it out. The short answer is obviously I don't think it's haram. Otherwise, I wouldn't be invested in it. With that being said, do leave a like if you haven't already. Hit the notification bell so you know when we go live next. Become a PIF member if you aren't already. And until next time, make sure to take care of yourself. Assalamu alaikum and peace be upon you all.