Name: Investor Called Tesla Crash, Now Buying These Stocks | Emmanuel Lemelson
Uploaded: 2025-04-05T04:55:37+00:00
Duration: 1731 s

Speakers

Emmanuel Lemelson — CIO of Lemelson Capital Management; Orthodox Priest

David Lin — Founder & Host, The David Lin Report / ex-Anchor, Kitco News

Summary

Emmanuel Lemelson, CIO of Lemelson Capital Management, joins David Lin to discuss his Tesla short and his highest-conviction value buys after recent market volatility. He remains bearish on Tesla due to brand damage, politicization, weak margins, and competition, while turning more bullish on broad equities and specific retail/apparel names. Lemelson highlights deep tangible-book discounts in Big 5 Sporting Goods and Kohl's, plus Nike, Guess, and Adobe, and favors index funds over hedge funds.

Lemelson remains short Tesla, citing politicization, brand damage, high fatality rates, China manufacturing, low margins, and competition.
He is more bullish on broad equities because prices have fallen and values have improved.
He says hedge funds underperform the S&P 500 and most investors are better off owning an index fund.
He discusses reciprocal tariffs as potentially inflationary but uncertain, with Europe likely to fold in negotiations.
He favors retail and apparel names, calling them cheap.
He still holds Big 5 Sporting Goods and Kohl's as deep tangible-book value plays.
He is very bullish on Nike, Adobe, and Guess, citing brand strength, consistent earnings, and low valuations.
He sold Walgreens after a buyout offer unlocked value.

Ideas

Emmanuel Lemelson CIO of Lemelson Capital Management; Orthodox Priest 4:24

More bullish as lower prices create value

He is more bullish on the broad market than a few months ago because prices have fallen and there are far more values; sentiment-driven forecasts from banks and hedge funds cloud rational thinking, and long investors now have a much greater opportunity, with some issues trading at sky-falling valuations reminiscent of March 2020.

Emmanuel Lemelson CIO of Lemelson Capital Management; Orthodox Priest 5:52

Tesla short remains despite recent decline

Tesla remains a short despite the sharp decline because its problems are systemic and unresolved: the brand is damaged by politicization, the vehicles have high fatality rates and recalls, 51% of vehicles are made in China, net margins are only around 7%, and competition from BYD and others is growing. He says it is not as good a short as in early December but still holds a small short position because the valuation remains unjustifiable and the stock trades like a politicized meme.

Emmanuel Lemelson CIO of Lemelson Capital Management; Orthodox Priest 14:21

Prefer index funds over hedge funds

In aggregate, hedge funds have underperformed the S&P 500, and their use of leverage, derivatives, and speculation is costly; the average investor would be better off almost always owning an index fund rather than following hedge funds or bank forecasts.

Emmanuel Lemelson CIO of Lemelson Capital Management; Orthodox Priest 22:25

Deep tangible-book discounts offer margin of safety

He still holds Big 5 Sporting Goods and Kohl's as Ben Graham-style cigar-butt deep-value plays: Big Five trades around $0.97 per share against just under $8 in tangible book value (about 12 cents on the dollar), while Kohl's trades around $8.25 against roughly $34 in tangible book value (about 24 cents on the dollar). He sees a huge margin of safety, does not expect either to go out of business, and notes Big Five has been around 70 years, though neither has a strong moat or Nvidia-like growth.

Emmanuel Lemelson CIO of Lemelson Capital Management; Orthodox Priest 23:16

Cheap, well-run brand with less risk

He is bullish on Guess because it is a great brand, well-run, very cheap, and has fallen since December 6, which in his view represents less risk if long the shares; he still holds it.

Emmanuel Lemelson CIO of Lemelson Capital Management; Orthodox Priest 23:48

Retail and apparel names are cheap

He is most bullish on retail, and says many apparel names are very cheap, offering great deals and using Nike as an example; the selloff has created opportunities similar to March 2020 for long-term investors.

Emmanuel Lemelson CIO of Lemelson Capital Management; Orthodox Priest 23:54

Iconic brand at lockdown-level valuation

He is very bullish on Nike: it is an epic, iconic American brand with extraordinarily consistent earnings, great margins, and a dividend. It is getting killed and trades at a P/E around 20, the cheapest since about 2010/15 years, and near levels seen during the 2020 lockdowns; product missteps have not materially hurt revenue, earnings, or the dividend, providing margin of safety for long-term investors.

Emmanuel Lemelson CIO of Lemelson Capital Management; Orthodox Priest 24:09

Walled-garden AI leader with consistent earnings

He is very bullish on Adobe because it has a tremendous legacy business that operates as a walled garden, extraordinarily consistent long-term earnings, effective management, and he expects it to emerge as a leader in AI; it is also cheap, reminiscent of March 2020 valuations.

Investor Called Tesla Crash, Now Buying These Stocks | Emmanuel Lemelson

Summary

Ideas

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