You don’t need to be a genius to earn money in the stock market. All those analyst reports and charts might better your chances of getting a higher return on investment (ROI) in the short term. But history shows passive investing in some no-brainer stocks at a good price earns you better ROI than active investing.
In the words of value investor Warren Buffett, “All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies.”
The logic behind no-brainer stocks
If you look at Buffett’s portfolio, his highest exposure is in some no-brainer stocks like Apple and Bank of America. The only difference is he bought these stocks in the crisis. For instance, his company Berkshire Hathaway bought more stocks of Apple in the fourth quarter when the stock slipped 19%.
While we are not here to talk about Apple, another no-brainer stock is Tesla (NASDAQ: TSLA) as it has been making strides in the electric vehicle (EV) revolution. But unlike Apple, Tesla has an unpredictable element, its founder Elon Musk. His wealth is in Tesla shares, and his actions, like buying Twitter and Dogecoin, are making Tesla shares more volatile than other EV stocks.
Buy three for one and diversify your portfolio
While Tesla started as a leader in the EV space, China’s BYD is challenging its EV supremacy. And guess who had purchased shares in BYD? Warren Buffett. He cashed out his BYD profits this year. Does it mean EVs value proposition has ended? EV momentum has just begun, but the market is getting competitive.
So instead of spending $173 on one Tesla share, you can buy the below three stocks to book your early seat to the EV rally.
Lithium Americas stock
It takes a million suppliers to make one car. While car supremacy will change, suppliers will be the same and benefit from the competition. Lithium Americas (TSX: LAC) is the mining company developing the Thacker Pass Project, which could house America’s largest lithium resources. Lithium is used to build EV batteries and other rechargeable and non-rechargeable batteries. Irrespective of who takes the EV market share, Lithium Americas will have demand for its products, which could drive the stock price.
The company expects to begin Phase 1 production in the second half of 2026. By the time the production commences, the recession should be over and the stock could grow triple digits.
BlackBerry stock
BlackBerry (TSX: BB) stock is moving with EV momentum and the tech industry sentiment. After the tech stock bubble burst, BlackBerry’s revenue and earnings dipped as reduced corporate IT spending delayed cyber security contract renewals. Moreover, the supply issues in the automotive industry delayed the royalty revenue for its QNX systems from car production. However, BlackBerry was actively securing design wins from as many automakers and component makers as possible.
The product design revenue kept BlackBerry’s internet of things (IoT) revenue stable. When the EV and other auto demand picks up, the software firm could realize the pending royalty revenue that could drive the stock price significantly.
Tesla vs. EV suppliers
Tesla’s share price dipped 42% in December, while that of LAC and BlackBerry fell 24.6% and 38%, respectively. When the EV stocks rallied in January, LAC and BlackBerry stocks surged 35% and 40%, while Tesla jumped 68%. This momentum shows that suppliers have a lower downside and upside than Tesla. You can diversify your Tesla risk by investing in multiple stocks for the same price as one Tesla share.
Ballard Power Systems
Ballard Power Systems (TSX: BLDP) is not into EVs but the future beyond EVs. It makes green hydrogen fuel cells for heavy vehicles and has been working with several industry players to make their fleets run on water. The green hydrogen fuel cell technology is yet to become economically feasible, but it has emerged as a viable alternative to natural gas in transportation.
Many governments are investing in green hydrogen, which means the stock could grow by leaps and bounds once this technology becomes mainstream. Ballard Power Systems stock is trading closer to its late 2019 levels of $7.3 and could be a game changer and give better returns than Tesla.
