Why Cathie Wood Paper Handed, Selling Tesla.

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let's get into the video hey everyone me

kevin here is kathy wood paper handing

tesla she just sold 297 million dollars

worth of tesla stock just this month

alone and folks are wondering

what's happening has kathy's insanely

high conviction in tesla shifted has her

3 000 plus price target by 2025 of tesla

stock

changed is she now a paper-handed weenie

baby and why even would she remotely

consider selling tesla is it the

infrastructure bill being drafted to

purposefully exclude teslas because the

united auto workers union lobbyists

that's a mouthful hate the fact that

tesla doesn't use unionized labor

i don't think so

is it because tesla's finally honoring

their contracts on their solar roofs and

not doubling the cost of people's solar

roof installations but instead in court

documents obtained yesterday

suggests that hey we'll honor the

contracts we signed we'll install those

solar roofs at the co at the cost that

we originally quoted not that inflated

cost we wanted later

no i don't think that's why kathy's

selling easier either

what about the fact that tesla is ending

their solar subscriptions which i

thought was an absolutely incredible

feature of tesla to essentially get

tesla solar panels installed on a lease

at essentially no upfront cost other

than the monthly fee and you could pause

that monthly fee at any time but tesla

has now canned these solar subscriptions

probably proved not profitable enough

which makes sense because it was a deal

that was too good to be true

what about that no that's probably not

why kathy's selling either what about

the fact that tesla's autopilot

still shows some issues although version

10.1 has been pretty freaking amazing

from everything that we can tell and the

vehicle continues to get smarter and

smarter and smarter driving itself now

that that actually seems like a good

thing that that probably would make me

want to buy tesla more so it can't be

can't have anything to do with autopilot

what about all those investigations into

tesla's accidents

well now they're notoriously few of them

compared to other manufacturers so i

don't i don't think it's that one either

uh well then why why would kathy wood be

selling so much

tesla stock you know when we compare

ourselves to kathy wood we think well

wait a minute like we love tesla at

least most of us probably do

we we wouldn't sell tesla unless all of

a sudden our conviction had changed

would we well maybe we would because

there are three reasons why kathy wood

is actually selling in my opinion there

are two primary reasons why kathy wood

is selling tesla and it has absolutely

nothing to do with any of the fud in the

news or any of the things that we just

talked about

instead

it's a lot more basic

now it's helpful to know what an etf is

which is what kathy wood sells you a

product an actively managed exchange

traded fund and it's really important to

separate this because we hear etf and we

just think it's one thing but really

what an exchange traded fund is is just

like a mutual fund it's a pool of money

and it just happens to be

on the stock market because it follows

certain rules and registers which means

anybody who buys the ticker symbol is

basically depositing money into the fund

so let's do an example here let's say

you had your very own actively managed

exchange traded fund

and somebody deposited a hundred dollars

into your etf and you said hey you know

what i'm going to put ten dollars into

tesla five dollars into apple and five

dollars into uipath the other tech

company

now you have these allocations right 10

tesla 5 apple 5 path

well what happens when apple goes up

tesla goes up and uipath goes down let's

say tesla's now 12 dollars six dollars

at apple and uipath is at two well now

assuming you have the same pie your

allocations are off you've got twelve

dollars in tesla you got six dollars in

apple you got two dollars in uipath so

what do you do well you sell some tesla

and you buy some uipath which is

literally exactly what kathy has been

doing which makes complete sense because

if you look at the sticks tesla since

may has been going up pretty

consistently if you type in path to see

the tickers here you'll see that path

has since may been pretty consistently

going down in fact here's may and it's

been going straight down so now this is

not always as simple as oh okay one

stock went up the other stock went down

so let's rebalance although that's

exactly what kathy does sure there are

some cases she might say hey uipath is a

three percent allocation we're gonna

bump it to a four percent allocation and

we're going to take one percent off of a

different stock like apple or whatever

else which is something that kathy does

she sees apple and amazon as cash parks

and plays like a uipath or tesla as big

return opportunities so that when it's

time to buy the dip she'll lower her

allocations in other these sort of cash

park stocks and instead she'll

concentrate down into these stocks that

have dipped and so her opinion and sort

of the way she kind of manages her fund

is that the more frothy the stock market

gets the more she'll broaden out her

investments and the more the stocks uh

the stock market in general falls or

stocks individually fall the more she'll

concentrate into those opportunities

that's been her management style her

belief and she's been very very clear

about that so this could be a method of

her diversifying into opportunities that

she thinks are going to be strong

profitable opportunities essentially

buying the dip while at the same time

just rebalancing her tesla allocation to

consistently be where she wants it to be

so this is in my opinion not a signal of

oh my gosh kathy is selling out of tesla

it's just a signal of rebalancing and

basically buying the dip in accordance

with the rules of the exchange traded

fund she set up but it's not just that

it's also the fact that kathy's funds

have been seeing more net withdrawals

unfortunately see this red line here

anytime the line is above the red line

like what we had at the end of last year

or beginning of this year right here

anytime the line is above the red line

it means kathy wood

and her funds are growing her funds are

getting larger which is good you get

money coming in that means you could

literally just keep buying if you have a

hundred dollars and ten of that is into

tesla and then somebody deposits another

hundred dollars you could go buy another

hundred dollars of tesla right but now

if somebody deposits a hundred dollars

and then the very next day takes that

hundred dollars back out you may have

bought a hundred dollars or that i'm

sorry that ten dollars of tesla the very

next day you might have to sell that ten

dollars of tesla because people want

their money back that's the way an

exchange traded fund works it's a big

pool people put money in kathy buys

people take money out kathy has to sell

and if you look at the line over here

the last three months the line has been

substantially below on average the red

line versus above there have been more

net outflows as compared to inflows this

is about 200 million dollars here on the

spikes per day of outflows i would say

the average is probably somewhere closer

to about 30 to 50 million dollars in

outflows per day and that would be

netted with with some of the gains over

here so maybe closer to 30 40 million

dollars of outflows per day but the

point is those are still outflows per

day you are having people net net

withdraw money from your fund so you

have to sell stocks to give them their

money back that is just the way an

exchange traded fund works hopefully

this gives you some perspective keep in

mind kathy wood is still very bullish on

tesla she's expecting a 300 return by

2025 especially based on or

you know if you look back at some of our

earlier by the dips uh in may where

tesla's price was in the 500s and folks

if you like my perspective always

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