The Tesla (Ticker: TSLA) Roadster rips from 0 to 60 MPH in 3.9 seconds (Don’t miss this: Tesla Roadster Spec. Sheet and Pricing).  It does it with stealth … it’s silent compared to the muscle cars of … not quite yesterday.  Ford Motor Co. is still selling 5.0L Mustangs.  The TSLA stock is up +40% today.  If you bought it at the open your price would have been around $19/share.  You would have witnessed with anxiety as the stock dropped steadily for the first 1/2 hour down to $17.60/share, and then cautiously cheered when the stock quietly recouped your buy-point by 2 PM, and you would have been outright satisfied (like sipping a fine wine in Napa) when the stock accelerated to $23.89/share at the close.  Based on your entry price of “regular folks” (as compared to those with shares of the IPO at $17) of $19/share, your gain on the day would be around +25.7%.  That would be great.  But it doesn’t come without risk of course.  Tesla doesn’t make any money, nor do they plan on making money until 2012.

Here’s what truly remarkable – The Tesla IPO attracted buyers during regular trading hours on a day that the DOW (DJ-30) was at one point down -320 points, and punching hard to the south below its 200 day moving average!  The stocks of attractive companies that make money have been hammered.  Fortunately, SMC 15MinuteStocks Market Update + Watchlist subscribers learned on April 29th that at the SMC we were heading to 100% cash, and protecting our +15.7% return for the year.  Our gains based on published entries and exits since our public debut last October are over +57%.

We are attracted to this Tesla story.  Tesla has published that the purpose for raising cash through the IPO is to raise money to increase production of their Model S sedan which lists currently at $49K/vehicle.  So far their strategy is a success.  With only a 13.3 million share float, this stock could rapidly enter the stratosphere with speculators gaming it higher and higher.  Today’s debut and strong showing in spite of a terrible background market, may indeed be a foreshadow of some highly explosive stock performance.  At the SMC we do not advocate speculative investing of this sort, but if the stock begins to show a predictable pattern that may lead to out-sized gains with minimal risk, we will step up and buy some, and let you know immediately when we do.  For fun, check out this video of a Tesla Roadster taking on a Porsche… (this one’s for SMC investor-friend, Neil B. in Louisville, KY).

What caused the market to fall off a cliff today?  Before the markets opened, an independent research organization called the U.S. Conference Board announced today that it was revising its April leading economic indicator for China from +1.7% to +0.3%. Markets in Asia fell hard.   Additionally, there are justifiable concerns in Europe concerning the European Central Bank removing a $544 billion 12 month lending facility that they put in place at the peak of the financial crisis last year.  The concern here is that banks will slow down their lending and that small banks may have trouble accessing funding – each of which will put added strain on an already very tenuous economic environment.  In other words, there is a heightened concern for a credit crunch.

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Please remember – at the Stock Market Companion we do not and cannot give individual investment advice. According to the State of Washington RCW 21.20.005 the Stock Market Companion is not a Registered Financial Advisor and we do not render any advice on the basis of the specific investment situation of a particular individual. This information is for a wide readership and is not intended for any particular individual,  and under no circumstances should our SMC Intraday Update, SMC 15MinuteStocks Market Update or Watchlist be considered an investment recommendation or plan for any specific individual.  By accessing this material, you agree that the Stock Market Companion will not be held liable for any actions taken by a subscriber or other parties.  Please seek the council of a broker or other licensed investment professional for accurate pricing and concerning the suitability of all investments that you may be considering. Disclosure : Please understand that the Stock Market Companion may hold positions in the above mentioned securities.  Based on market related or personal events these positions may change without notice.