Q2 2012, Issue #56

Better Earnings, or Cautious Expectations?

It's hard to believe it's been over 3.5 years since the demise of Lehman Brothers, the dramatic climax of the financial crisis that's still fresh in many minds today. Although the economic recovery has come a long way, sentiments still seem rather negative.

Statistically it seems that things are on the right track. Unemployment numbers are slowly improving, and in the past week companies reporting earnings are mostly beating analyst expectations. In fact some companies, like Amazon, completely blew the estimates out of the water. Yet still we brood. Perhaps worried that the next mini crisis is just around the corner. Perhaps we should blame the media? During some weeks, I've seen the headline on some mainstream news sites alternate daily between "Greek Worries Intensify" and "Greek Worries Eased", sparking associated declines and rallies.

Has the economy improved to the point where company earnings are handedly beating the spreadsheet computations of Wall Street, or are the analysts now a much more cautious bunch? Either way, the market has had a nice run upwards, through the gloom. Year to date the S&P is up over 11%, and if you look into the past 3 years, the index has gained almost 60%.

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Firstrade's Favorites
Check out the stocks currently held by the largest number of Firstrade accounts. This list does not take into consideration the number of shares or the share price.

1. C - Citigroup Inc.
2. GE - General Electric Co.
3. BAC - Bank of America Corp.
4. AAPL - Apple Inc.
5. F - Ford Motor Company
6. MSFT - Microsoft Corp.
7. CSCO - Cisco Systems Inc.
8. INTC - Intel Corporation
9. SIRI - Sirius XM Radio Inc.
10. VWO - Vanguard MSCI Emerging Markets ETF (still the first, and only ETF on the list)

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A Quick Look @ Tesla Motors (NASDAQ: TSLA)
In every issue we take a quick look at a stock that has been in the news. Feel free to make suggestions as to what stock you would like to see covered next by sending an email to editor@firstrade.com, or the editor will pull a random symbol out of a hat.

In this issue, we'll take a look at Tesla Motors. (NASDAQ: TSLA). It's fairly common knowledge how difficult it is to start a new car company. Just look at the roads today, most of the makes trace back to the early 1900s. Tesla's business model eliminates the defining component of the modern day car: the gas engine, and replaces it with an electric motor. With one model already on the road and two in the pipeline, does this company have what it takes to one day reach the same level as Ford, Chrysler or GM? Leading this ambitious challenge is billionaire genius Elon Musk, the founder of Paypal who is also operating a commercial space company Space X. Makes you wonder which is harder... mass manufacture the electric car or create manned space flights? Here are some key moments in Tesla's history:

Key Events:

1. 2002 - Paypal.com was acquired by eBay, laying the groundwork for funder Elon Musk to pursue his ambitious dream of building an electric car company.
2. 2003 - Two teams sought to commercialize the T-Zero prototype electric sports car created by AC Propulsion. The two teams merge to form Tesla Motors.
3. July 2005 - Tesla entered an agreement with British sports car maker Lotus, which provides the chassis for the Roadster.
4. July 2006 - The Tesla Roadster was publicly unveiled.
5. February 2008 - The first Tesla Roadster was delivered to Elon Musk.
6. March 2009 - Tesla unveiled the Model S sedan at SpaceX, the commercial space flight business also founded by Musk.
7. May 2009 - Daimler AG, maker of Mercedes Benz acquired a 10 percent stake in Tesla.
8. May 2010 - Tesla and Toyota announced a partnership to build electric vehicles.
9. December 2011 - Production ends for the Tesla Roadster.
10. March 2012 - Tesla unveiled the Model X crossover SUV at the Geneva Motor Show.